Governor vetoes real estate-related bill

Gov. Brad Little vetoed a bill on March 25 that would have allowed a homeowner to appeal a property tax assessment and substitute a recent documented sale price instead. The veto came despite the passage of the bills by a majority of both Idaho’s House and Senate.

“Tax policy should be fair, simple, and predictable,” the Governor said in a statement. “This legislation if passed has the potential to result in unintended tax shifts as well as a lack of uniformity in the process of property tax assessment.”

The bill originally allowed a property owner to appeal a county tax appraisal within 12 months and to override it with the amount of an “arm’s length transaction” for the property or a current appraisal completed by an Idaho-certified appraiser. An arm’s length transaction is one where the buyer and seller are unrelated.

House Bill 561 was originally the brainchild of Rep. Mike Moyle, R-Star. Moyle was also the sponsor of House Bill 409, which aimed to freeze property taxes for a year, and House Bill 353 to change the rules on foregone tax collection. The first died in the Senate and the second in committee.

The unamended HB 561 passed the House 63-7-0. One of its naysayers, Rep. Jerald Raymond, R-Menan, told the Idaho Press that he had heard concerns over the bill from county assessors in his rural district.

“We’re removing the ability of an elected official to make a decision, as opposed to a real estate agent,” he remarked.

The Idaho Senate amended the bill to drop an appeal based on a current appraisal, only allowing that “the documented sales price shall establish the market value for (property tax) assessment.”

The senators then passed it with a vote of 32-0-3 on the second-to-last day of the legislative session.

Sen. Dean Mortimer, R-Idaho Falls, remarked favorably on the bill during the very short Senate debate.

“After 31 years as a mortgage banker and having worked in the appraisal industry for most of my career, that’s the real definition of value: when a knowledgeable, willing and able buyer and a knowledgeable, willing and able seller with no relationship determine an actual value and come to an agreement on it … that’s what this (legislation) indicates and I’m glad to see it finally defined.”

Mere hours later, the House also approved of the amended bill 53-12-5. The Governor vetoed it a week later after the Legislature adjourned.

A guide to the past 2020 legislative session

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The Idaho Legislature focused more of its attention on social issues than on business ones. File photo

Before the start of the legislative session, Idaho Business Review looked at issues on the agenda likely to affect Idaho’s businesses. What ended up happening? Here’s an overview of the session, which effectively ended on March 20 when the House voted to adjourn sine die.

Rules. When the Legislature adjourned last year, it failed to pass the traditional “drop dead bill,” which automatically continues all rules forward until the next year. This gave Little, along with state agencies, unprecedented control over rules, resulting in what he said was elimination or simplification of 75% of them, making Idaho the “least-regulated state in the U.S.”

So what happened this year? The Legislature spent several weeks going over the rules and considered a new procedure to replace the “drop dead bill,” which would also create a new process when the House and Senate disagreed on a rule. Currently, only one body has to approve a rule for it to go into effect. But the bill for the new process didn’t pass, nor, did it appear, the traditional “drop dead bill,” meaning that Gov. Brad Little may get another opportunity to Marie Kondo administrative rules.

Occupational licensing. Some rules govern requirements for people to enter and work in a particular profession. Legislators wanted to reduce or eliminate those rules to make it easier for people to work in Idaho, particularly military spouses and veterans. The Legislature passed a bill to set up a review committee for future occupational licensing regulations, to create a process for recognizing out-of-state licenses and to remove archaic language around background that would make someone ineligible for a license.

City budgets. As property values have gone up, some property taxes have gone up as well, and citizens were protesting. A property tax working group held hearings over the summer, considering the possibility of limiting the ability of cities to raise revenue.

However, especially with the rush to get out of town at the end of the session due to the COVID-19 coronavirus, the Legislature was unable to agree on any of the property tax proposals, other than one intended to help veterans — and one to create an interim committee to look at the issue again — with most of the rest being sent to a committee to die. On the other hand, the Legislature also didn’t cap the ability of cities and counties to increase their budgets.

Broadband. The governor’s Broadband Task Force issued a final report that called for a number of initiatives, including setting up a state broadband office. The office was funded as part of the Department of Commerce budget.

IT modernization. Idaho’s Office of Information Technology Services put forth the next steps in the state’s IT modernization project, which centralizes IT control in an office under the governor instead of in individual agencies. The project was funded as part of the Controller’s budget.

Data center tax exemption. After several years of trying, the Legislature passed a bill exempting data center equipment from sales tax to encourage large data centers to set up shop in Idaho. At press time, it was awaiting Gov. Brad Little’s signature.

Ban the box. Similarly, supporters of a bill to help former felons more easily apply for jobs tried again, and the bill — now called the Fair Chance Employment Act — passed the Senate and the House Judiciary and Rules Committee. However, it never got voted on by the full House.

Hemp. Little signed an executive order in November to allow companies to transport hemp across Idaho but called it a stopgap measure until the Legislature could address the issue and comply with federal law. However, three bills to address the issue died in the Senate State Affairs Committee, meaning Idaho will remain just one of two states that don’t allow growing or transporting of hemp.

Grocery tax. Little campaigned on eliminating the sales tax on groceries but also said funding education took priority. While the Legislature considered several options, such as using tax collected from internet sales to increase the grocery tax credit, in the end nothing passed.

Liquor licenses. Sen. Jim Rice, R-Caldwell, said he didn’t intend to try again to ease restrictions on liquor licenses, and no other legislator picked up the issue.

University diversity. Some legislators said earlier this year that they planned to limit state universities’ efforts to fund diversity programs. As it happens, it took the House three tries to pass a higher education budget, with some legislators specifically calling out the diversity programs as the reason.

Transportation funding. A report on the transportation funding backlog isn’t due until June, and Little had said he wants to wait until that report is done before considering how to fund transportation going forward. A bill to create a transportation endowment fund was pulled; a bill to devote 2% of sales tax revenues to bridge repair and road expansion passed the Legislature but was vetoed by the governor.

Sine Die. With this being not just a legislative election year, but also a presidential election year, there was pressure to end the session early, with added emphasis from COVID-19. In fact, several legislators decamped early due to coronavirus concerns. The Legislature ended up adjourning on March 20, as planned, giving up the opportunity to overrule Little should he veto any bills, such as several controversial bills about transgender people that led major Idaho businesses to encourage such action.

Social issues preoccupy Idaho Legislature to the detriment of business, critics say

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As the Idaho legislative session winds down, legislative leadership met with the Idaho Press Club in an annual tradition on March 10. Photo by Sharon Fisher

Like this year’s legislative session itself, a recent press conference with legislative leadership and the Idaho Press Club found that social issues sucked up most of the oxygen in the room.

Held on March 10 at the Beside Bardenay event space in Boise, Speaker of the House Scott Bedke, R-Oakley, Senate President Pro Tem Brent Hill, R-Rexburg, House Minority Leader Ilana Rubel, D-Boise, and Senate Minority Leader Michelle Stennett, D-Ketchum, focused primarily on legislation concerning issues such as whether transgender girls could play on girls’ athletic teams and whether transgender people could change the gender marker on their birth certificates — some of which don’t comply with existing federal law or court rulings.

Rubel said she was frustrated by the “hard right turn into divisive social issues” the Legislature had taken this year.

Such issues have been front and center this session because it’s an election year and legislators running for re-election want to push an agenda, even if the bills themselves don’t pass or are struck down by the courts later, Stennett said.

Business concerns

Major Idaho businesses Chobani, Clif Bar, HP and Micron sent a letter to the Legislature on March 2 expressing concern about some of these bills, as did Mark Peters, director of Idaho National Laboratory, on March 3.

“Passage of these bills could hurt our ability to attract and retain top talent to Idaho,” the four businesses wrote.

“As an institution, INL places great value on inclusion and diversity,” Peters concurred.

In addition, the Boise Metro Chamber has raised concerns about HB 440 — which bans preferences for minorities in state or local government hiring, contracting or public education — saying it would make it harder to recruit employees and hurt businesses.

Such social issues — combined with actions like the House voting down the higher education budget because, according to some representatives, it included funding to increase diversity — can give the impression that the state is not welcoming to minorities, opponents have said. Bedke said he planned to meet with the companies to explain that the transgender athletics bill, in particular, was an issue of “basic fairness.”

Hill said the Senate had amended HB 440 to carve out an exemption for higher education. Bedke said that the Idaho Transportation Department had also expressed concern about the state’s eligibility for some grants should the bill pass in its current form and that he hoped those concerns would be addressed.

Possible recession?

With the stock market’s recent gyrations and other indications that a recession may be looming on the horizon, the Legislature needs to look at issues such as reducing residential property taxes and potentially reducing appropriations, while at the same time being prepared to increase appropriations in areas drawn upon more heavily in a recession, such as higher education, legislators said.

“The best time to prepare for a recession is when you aren’t in one,” Bedke said, noting that the economic situation puts increased pressure on the Legislature to cut property and other taxes.

Rubel lamented that several bills that could lower residential property taxes were languishing in committee chairs’ drawers rather than being voted on by the House. However, even with the planned sine die adjournment of March 20, there is still time for the Legislature to address some of those issues, Hill said. That could include raising income eligibility and the credit benefit for the circuit breaker provision, which gives senior citizens and the disabled a break on their property taxes; raising the homeowner’s exemption from the current $100,000 and possibly indexing it to another statistic, he added.

A bill from Rep. Mike Moyle, R-Star, that had passed the House froze property taxes for a year, but it was amended in the Senate by Sen. Jim Rice, R-Caldwell, to instead limit cities and counties to a 4% budgetary increase per year. Bedke said he thought the House would concur with the Senate’s changes.

Compromise municipal broadband bill under development

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Gov. Brad Little, speaking to the Idaho Press Club, said there couldn’t be a one-size-fits-all solution for broadband internet in Idaho. Photo by Sharon Fisher

An alternative bill to allow cities to operate municipal broadband networks without imposing restrictions included in an Idaho House bill written by cable providers is being developed in the Idaho Senate.

Idaho cities would like to treat broadband internet like a utility — as they do with sewer and water — but incumbent broadband internet providers are opposed to that, said Sen. Bert Brackett, R-Twin Falls, who is meeting with stakeholders to try to find a compromise. His bill has not yet been brought to a committee for printing.

The other major impasse is whether a city could use funding mechanisms such as local improvement districts (LIDs) to fund network construction because that’s something that private companies aren’t allowed to do, Brackett said.

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Bert Brackett

Rep. Ron Mendive, R-Coeur d’Alene, who sponsored H490, the bill brought forth by Idaho cable providers, is also participating in the stakeholder meetings, Brackett said.

‘Muni killer’

Several Idaho cities — most notably Ammon — offer or are working on city-provided broadband internet networks and services. Telecommunications providers criticize such efforts, saying that government is competing with private industry using resources provided by taxpayers to which the private providers don’t have access.

Mendive’s bill, which was printed by the Local Government committee in early February but has languished since then, would allow cities to continue providing broadband internet services, but with a raft of restrictions that would essentially make it impossible for the cities to continue offering the services, including forbidding cities from using LIDs. Ammon’s technology director called the bill a “muni killer.”

Gov. Brad Little, during his annual Idaho Press Club breakfast interview on Feb. 19 at the Beside Bardenay event space, indicated that he was aware of both bills and that it was likely that broadband internet would need to look different in different parts of the state. The governor has been a supporter of broadband internet in Idaho and formed a task force over the interim to look at ways to improve services, including hearing from cities such as Ammon. He stopped short of saying he supported one over the other or that he would veto one he didn’t like.

Brackett said he and Mendive were meeting with Senate President Pro Tem Brent Hill and Speaker of the House Scott Bedke to determine a direction for the two bills.

“Certainly, we’d rather have basic agreement before we run legislation,” he said. “We’re running out of time.”

But calling himself an eternal optimist, he said he hoped he would be able to find agreement among all the parties in time.

Other states

In a number of other states — 19 or 25, depending on the source — cities are forbidden by similar law from setting up their own municipal broadband systems because it is considered to be government competing with private industry, even when private industry isn’t offering broadband internet service. Such bills were often written or promoted by telecommunications companies.

While the Federal Communications Commission (FCC) voted to block such laws in 2015, a federal appeals court said in 2016 that the FCC didn’t have that power.

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Joshua Stager

“I thought the tide had turned on these laws,” said Joshua Stager, senior counsel for the Open Technology Institute, a Washington, D.C., think tank and advocacy group that works on closing the digital divide, which recently published a report on Ammon’s network. In fact, a number of states are repealing similar laws that were enacted a decade ago, he said.

“On the one hand, it’s surprising to hear of a state considering a stricter law,” Stager said. “But whenever there is a successful network like Ammon, the industry fights back” because it doesn’t want the successful network used as an example, he said.

The Idaho Freedom Foundation, a Boise-based conservative think tank, has come out against H490 because it allows cities to continue to operate broadband internet networks, which it believes should not be the role of government.

More from the Governor’s press conference

Gov. Brad Little touched on a number of other issues during his breakfast press conference with the Idaho Press Club.

On property taxes: A number of questions alluded to property taxes, about which several bills are floating around the Statehouse. Little noted that in some areas, property taxes had actually gone down and that in cases where they had gone up, that was sometimes due to supplemental levies to fund education, which he said he preferred not to happen. Capping property taxes could end up spawning special taxing districts, he warned. He also suggested alternatives such as increasing the circuit breaker law and reinstituting indexing, though he warned against putting tax policy on autopilot. He also noted that out of the 10 fastest-growing metropolitan areas in the U.S., “I’ve got half of ‘em.”

On transportation: Little said he was meeting with legislators to talk about finding funding to maintain the state’s aging bridges, and said that he was not as opposed as his predecessor — Gov. C.L. “Butch” Otter, though he didn’t mention him by name — to using state general funds on transportation, though he preferred not to.

On hemp: Little said that while he came from an agricultural background, he never grew hemp, though had friends who had grown a similar product. He implied that a bill on legalizing the growing of hemp in Idaho had been the victim of intercameral infighting the previous session and that he didn’t have an objection to it so long as it wasn’t being used to disguise marijuana cultivation.

On the firearms business: Little was enthusiastic about a bill that would provide more gun ranges on private land and about the recreational technology industry in general, saying it was scalable to rural Idaho.

On public records: Little said he hadn’t yet seen a bill that purportedly would restrict some information about legislators from public records laws and so couldn’t comment on it. Regarding providing an appeals process when agencies reject public records requests — currently, the only alternative is to bring a lawsuit — he said agencies should just provide the information rather than spending state money by fighting requests.

Little decides to ‘spark joy’ with agency rules reduction

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Gov. Brad Little recently issued two executive orders reducing the number of administrative rules and making them easier to understand. Photo by Sharon Fisher

After a summer of Marie Kondoing Idaho state rules, Gov. Brad Little wants to do it every year.

The governor announced two executive orders on Jan. 16. The first, “zero-based regulation,” called for agencies to examine 20% of the state’s administrative rules each year and look for ones to eliminate or streamline.

The second, “Transparency in Agency Guidance Documents,” stresses that rules, which are promulgated by state agencies as a means of implementing laws legislators pass, are not themselves law. “Transparency in Agency Guidance Documents” also makes it easier for the public to find out where rules come from.

“The nature of government is to grow, and that’s not a malicious thing,” Little said.

Little had signaled his intention to issue the first executive order during his State of the State message on Jan. 6.

How did we get here?

Last year’s Legislature failed to pass the “drop dead” bill, which normally continues rules to the next year. This gave Little’s office, working with agencies, broad latitude to look at rules and eliminate or streamline them. As a result, 75% of the state’s rules were reduced or eliminated, leading him to call Idaho the “least-regulated state in the Union.”

Little had issued the “Red Tape Reduction Act” executive order in 2019 requiring agencies to  eliminate or simplify two rules for every new one they wanted to impose. Last year’s legislative conflict meant that effort succeeded beyond Little’s wildest dreams. Instead of 2-1, it was more like 83-1, he said.

Little said the zero-based initiative wasn’t predicated purely on the summer’s effort, but was something he’d wanted to do anyway. As lieutenant governor under Gov. C. L. “Butch” Otter, Little had issued an executive order to simplify licensing requirements.

The zero-based effort, in fact, is reminiscent of Otter’s zero-based budgeting initiative starting in 2008, where the governor more thoroughly examined about 20% of agency budgets each year.

Examined rules would be spread across several agencies each year, and agency rules would likely be spread across multiple years, rather than legislators being expected to examine all the rules in the Department of Health & Welfare in a single year, Little said. A schedule is supposed to be available by Oct. 1, and agencies aren’t supposed to add any rules this year, according to the executive order, which also repeals the “Red Tape Reduction Act.”

What’s the Legislature doing?

The Legislature is reviewing and accepting rules. This is how the Legislature typically starts the session – the only legislature in the country to do so – but this year the Legislature has to accept all the rules, not just new ones. Sen. Brent Hill, R-Rexburg, president pro tem, had said at the beginning of the session he expected it to take a couple of weeks longer than usual.

The Legislature is also still working out a compromise on approving or rejecting rules between the current system, in which only one body has to approve a rule, and a system preferred by the House, in which both bodies would have to approve a rule. The logjam over that bill is what led the House and Senate not to pass the “drop dead” rule last session.

“We’re walking toward each other,” but the two bodies have not yet met in the middle, said Speaker of the House Scott Bedke, R-Oakley.

Hill indicated that leadership had reached an agreement over the summer, but the members were still working on it. While the Legislature could theoretically add an emergency clause to the bill and have it apply to this year’s rulemaking process as well, Hill had said at the beginning of the session that the new law would go into effect for next year’s rules process.

It’s apparently also not out of the question the two bodies could fail to pass the “drop dead” bill a second time, but both Little and Legislative leadership said they hoped that wouldn’t happen.

Legislation written to fix Idaho drone laws

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Upcoming legislation is intended to make it easier for public safety organizations to use drones in their work. File photo

IDAHO FALLS – A public safety advocacy organization is putting forth a bill for this legislative session that would make it easier for public safety groups – and, potentially, businesses – to use drones and other unmanned aerial systems (UAS) in Idaho.

The organization is the Idaho Public Safety UAS Council and is based here.

Attendees of the Idaho UAS Situational Awareness Workshop, sponsored by the Pacific NorthWest Economic Region (PNWER) Center for Regional Disaster Resilience, held in June at the Riverside Hotel in Garden City, had said that Idaho laws made it hard for them to run their businesses. Some reported losing business because of such laws. This legislation is an attempt to deal with the issue.

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David Barker

“The main intent of the amendment is to allow for the improved utilization of UAS technology for use in traffic accident documentation and reconstruction purposes,” said David Barker, administrator for the Idaho Public Safety UAS Council, in an email message. “Other issues that may be resolved in the process are simply a bonus.”

Conflicting laws

Current Idaho statute requires a warrant first be issued for law enforcement to use UAS for traffic accidents or other purposes in public areas, which flies in the face of standing case law that defines such areas as “without an expectation of privacy,” Barker said. Not only does this take time, but judges are questioning why warrants are being applied for case law that clearly states one is not required, he said.

“Basically, we want to allow first responders to better utilize the technology for the benefit of their citizenry, without the need to clog the courts with unnecessary and contradictory warrant requests,” Barker said.

The initial amendment was drafted by Idaho Falls assistant attorney Michael Kirkham, who has been involved with the Idaho Falls Police Department’s UAS program since its inception and who has worked with Barker to obtain UAS warrants on several occasions, he said.

Doesn’t cover everything

That said, the amendment doesn’t address two other major issues, Barker said. First, it doesn’t address Idaho’s so-called Ag Gag law, which is intended to prevent spying in agricultural businesses but has been found to be unconstitutional.

Second, one part of Idaho’s Section 21-213 drone legislation prohibits photographing an individual without consent for the purposes of publishing the photograph. A similar provision in Texas law is being challenged by several Texas press organizations as a violation of the First Amendment, intended to prevent journalists from using drones to help report news.

“These issues are not addressed in this amendment on the belief that doing so would be too much to handle in one amendment to get a consensus,” Barker said.

While some attendees of last June’s session had encouraged Idaho to petition the Federal Aviation Administration to control UAVs in its own airspace, the organization is not planning to address that issue, Barker said.

“We believe the National Airspace System needs to continue to be managed by a single regulatory entity, to avoid creating a patchwork of rules and regulations that could vary from location to location,” he said.

The legislation is expected to be co-sponsored by Rep. Doug Ricks (R-Rexburg) and House Chairman Joe Palmer (R-Meridian), the organization said.

“While there are still a number of steps in the process, we have been assured that the amendment will be given a committee hearing, something the 2018 amendment proposal did not get,” the organization wrote to its membership.

Gov. Brad Little announced a budget of $75,000 for a state drone office intended to coordinate 90 programs across Idaho state agencies in his State of the State message on Jan. 6.

Idaho has spawned a number of businesses involving drones and other forms of UAS, including Black Sage Technologies and Pitch Aeronautics. In addition, the University of Idaho is developing a UAS that is intended to help search for life on the surface of Titan, one of Saturn’s moons.

Legislative, gubernatorial press conferences reveal different priorities

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Rep. Scott Bedke, left, and Sen. Brent Hill, center, about to discuss legislative priorities at a Jan. 3 press conference. Photo by Sharon Fisher

The priorities of Gov. Brad Little and the Idaho Legislature may not completely mesh, based on press conferences the governor and legislative leadership had in the Idaho Statehouse on Jan. 3 and Jan 6.

While the emphasis from the governor was primarily on public education, the Legislature is more focused on cutting property taxes and setting legislative rules.

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Jaclyn Kettler

“It is important to remember that many of the governor’s proposals will need the Legislature’s approval,” said Jaclyn Kettler, assistant professor of political science at Boise State University, in an email message.


The first job of the Legislature each session is to approve rules that agencies implemented over the interim, something that no other state legislature does. Last year’s Legislature failed to pass the “drop dead” bill, which continues rules to the next year, meaning the Legislature has to approve all the rules this year.

The increased number of rules may mean that the rules approval process could take a couple extra weeks, said Sen. Brent Hill, R-Rexburg, the president pro tem.

The bottleneck last year had to do with changing the rules approval process. Right now, only one body of the Legislature has to approve a rule for it to go into effect. Last year, the House wanted both bodies to approve a rule for it to go into effect, while the Senate wanted to maintain the current system. Hill said that while that issue could be revisited during this legislative session, it wouldn’t affect the rules that need to be approved this year.

Speaker of the House Scott Bedke, R-Oakley, said his highest priority was to get that rules debate straightened out and indicated that a compromise was in the works, but wouldn’t provide details.

Property taxes

Discussion before the legislative session, including an interim working group, focused on reducing property taxes, with legislators mentioning possible solutions including capping the ability of cities and counties to increase their budgets, allowing school districts to impose impact fees on new growth, increasing the circuit breaker provisions for senior citizens and reimplementing the index on the homeowner’s exemption from property taxes, which was capped at $100,000 in a previous session.

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Brad Little. Photo by Sharon Fisher

But changing guidelines on any property taxes could have unintended consequences, legislators and the governor agreed. Setting up a new system based on Boise or Ada County might not work in more rural counties that aren’t growing so fast, they said.

Without reducing property taxes, Idaho could run the risk of a citizen’s initiative along the lines of California’s Proposition 13, Bedke said. That proposition essentially froze property taxes for homeowners as long as they stayed in the same house.

Last year’s Legislature put forth bills to make such an initiative more difficult, but they were vetoed by Little. Legislators didn’t say whether they planned similar actions this session, but Hill and Bedke said that if citizens were writing bills, they should require statements of purpose and fiscal impact notes like bills written by legislators do.

Grocery tax

In some cases, Little provided a dollar figure in his budget but left the actual policy implementation up to the Legislature. For example, while he called for $35 million to lower the grocery tax, how that might actually be implemented is a policy decision.

The $35 million isn’t enough to fill the gap in the budget caused by eliminating the grocery tax entirely, but it could be used to increase the grocery tax credit, Bedke said. In fact, the Legislature might even bump the amount up to $40 million, he said.

Using it to increase the grocery tax credit would benefit Idahoans, who receive the grocery tax credit when they file their state income taxes, while still charging the grocery tax to out-of-staters, Bedke said. The increase would amount to about $175 in groceries each month, he said. In addition, increasing the grocery tax credit could reduce the grocery tax revenue to the point where it could be eliminated in future years, he said.

A guide to the upcoming 2020 Idaho legislative session

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Starting Jan. 6, legislators will expect to spend a lot of time in the Idaho Statehouse. File photo

On Jan. 6, Gov. Brad Little gives his State of the State speech at noon in the Idaho Statehouse, kicking off the official beginning of the legislative session. Here’s a quick look at a number of issues on the agenda that are likely to impact Idaho’s businesses.

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Brad Little

Rules. When the Legislature adjourned last year, it failed to pass the traditional “drop dead bill,” which automatically continues all rules forward until the next year. This gave Little, along with state agencies, unprecedented control over rules, resulting in what he said was elimination or simplification of 75% of them, making Idaho the “least-regulated state in the U.S.”

However, unlike every other state, the Legislature will need to approve these rules for them to continue. Will that happen? How long will it take? What rules might be voted down? And will the Legislature pass a bill it tried to pass last year, which would require both houses, not just one, to approve all rules?

Occupational licensing. In particular, some of those rules govern requirements for people to enter and work in a particular profession. Some legislators would like to reduce or eliminate those rules to make it easier for people to work in Idaho, particularly military spouses and veterans. On the other hand, there are arguments against changes to rules to ensure consumer safety and competition. What will be the result?

Budget. Little’s speech will include his estimate of what he thinks the Idaho economy will do in fiscal year 2021, which runs from July 1 to June 30, 2021. However, this is just a proposal; the Legislature determines the final figure, and in 2019, approved a figure $93 million lower than his. Nonetheless, some of last year’s revenues were below projections at times, and in October Little called on state agencies to cut their budgets this year by 1% and to identify a 2% base reduction for next year. What revenue percentage will he use? What projection will the Legislature approve? How well will state revenues match those projections in the coming year?

City budgets. As property values have gone up, some property taxes have gone up as well, and citizens are protesting. A property tax working group held hearings over the summer, considering the possibility of limiting the ability of cities to raise revenue. At the same time, there has also been discussion of letting cities and other entities set up “rainy-day funds” like the state can. What will be the upshot and what will be the effect on property taxes?

Broadband. The governor’s Broadband Task Force issued a final report that called for a number of initiatives, including setting up a state broadband office. Will the governor fund it? Will the Legislature pass it?

IT modernization. Idaho’s Office of Information Technology Services will put forth the next steps in the state’s IT modernization project, which centralizes IT control in an office under the governor instead of in individual agencies. Will the legislature approve it?

Data center tax exemption. A late-session informational hearing found legislative support for a tax break for computer equipment to encourage data centers to set up shop in Idaho. The industry has indicated that it wants to try again. Will 2020 be the year?

Ban the box. Similarly, supporters of a bill to help former felons more easily apply for jobs have said they plan to try again.

Hemp and marijuana. Little signed an executive order in November to allow companies to transport hemp across Idaho, but called it a stopgap measure until the Legislature could address the issue and comply with federal law. Will it do so? And, viewing the results that neighboring states have had, will the Legislature legalize marijuana in some form, and will Little veto the bill if it does?

Grocery tax. Little campaigned on eliminating the sales tax on groceries but has also said that funding education takes priority. Will the legislature agree?

Liquor licenses. Sen. Jim Rice, R-Caldwell, has said he doesn’t intend to try again to ease restrictions on liquor licenses. Will another legislator pick up the issue?

University diversity. Some legislators said earlier this year that they plan to limit Idaho state universities’ ability to have or fund diversity programs. With the increasing demand for a skilled workforce, will this happen?

Transportation funding. A report on the transportation funding backlog isn’t due until June, and Little has said he wants to wait until that report is done before considering how to fund transportation going forward.

Sine Die. With this being not just a legislative election year, but also a presidential election year, there will be pressure to end the session early. But with budget and rules issues, how likely is that to happen?

Legislature’s working group to examine property taxes, municipal budget increases

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With cities like Meridian among the fastest-growing in the U.S., some people are concerned about rising property taxes. Image courtesy of city of Meridian

The Idaho Legislature has formed a working group with the intention of looking at city and county property taxes, which could include lowering the amount of city and county budgets as well as reducing the amount that individuals pay.

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Robert Anderst

“That’s the goal of the working group: To start with a fresh perspective on how assessments are established and also how the budgets for municipalities are established,” said working group member Rep. Robert Anderst, R-Nampa.

The 10 members of the bipartisan, bicameral working group include co-chair Rep. Gary Collins, R-Nampa, and Rep. Mat Erpelding, D-Boise.

How high are Idaho property taxes?

In a press release sent out by the Idaho House Republican Caucus, Collins said the working group was necessary because Idaho’s property taxes are “some of the highest in the nation.”

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Renee Eymann

According to the 2018 Idaho State Tax Commission State and Local Tax Burden Analysis for fiscal year 2016, the most recent year for which the analysis was made, Idaho ranks 42nd in the country, and its property taxes are 39.3% below the national average. A new version is expected in December, according to Renee Eymann, public information officer for the Boise-based office. She would not comment on the statement in the press release.

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Stephanie Witt

“I have a hard time believing we’ve managed to become the highest when we were 40% below the national average three years ago,” said Stephanie Witt, a professor in the School of Public Service at Boise State University.

According to the Tax Foundation, a Washington, D.C., independent tax policy nonprofit, Idaho property taxes amount to 26.9% of total state and local tax collections, using fiscal year 2016 data. That ranks Idaho 32nd in the nation. And according to a study published by GoBankingRates, Idaho ranked 38th in the nation.

Tax rates range from a high of 1.851% in Nez Perce County to a low of 0.566% in Custer County, according to a report on the Idaho Tax Commission website.

What’s caused the increase?

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Miguel Legarreta

One issue: while cities and counties are limited to raising their existing budgets by 3% annually, that limitation doesn’t apply to new construction and annexation, which means that city and county budgets are actually increasing by 10% annually or more, said Miguel Legarreta, president of the Associated Taxpayers of Idaho, a Boise-based nonprofit.

City and county budgets are also more difficult to monitor than state budgets, Legarreta said.

“If they’re collecting more or less than they need, it’s tough for a taxpayer or a tax organization to know,” he said.

Aside from increases in property values, a number of factors have also increased property taxes, including the rising number of school districts that depend on supplemental levies – all but 22 districts are in this category – a $100,000 cap on the homeowners exemption enacted in 2016 and the 2013 business property tax exemption, said Sasha O’Connell, senior policy analyst for the Idaho Center for Fiscal Policy, a Boise-based nonprofit, nonpartisan organization for Idaho budget and tax policy.

What the working group could do

Anderst didn’t want to provide specifics on what might be considered, saying he didn’t want to get out ahead of the working group, which is scheduled to meet on Oct. 21 in the Idaho Statehouse, in Boise. But he agreed that all of these were options the working group could look at.

“If you’re looking at it from the budgeting side, there are things to potentially slow the growth of those municipal budgets,” Anderst said. “On the collection side, there are things you can do to spread the collections in a different way or provide different funding mechanisms.”

Another option that’s come up for discussion is a freeze on property tax increases similar to that of California’s Proposition 13, and an update to the “circuit breaker” property tax exemption for senior citizens, which O’Connell said hadn’t been changed since 2006.

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Mat Erpelding

Erpelding said in an email message that because the circuit breaker hasn’t been updated, “many seniors are priced out of their homes.”

Cities, counties could get ability to save for a rainy day

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While rainy days are inevitable, a new kind of budget stabilization fund could help local governments weather the storm. Photo by Sharon Fisher

The state can save funds for a rainy day, but until now, other taxing entities such as cities and counties couldn’t. But that could change in the upcoming legislative session.

Sen. Jim Rice, R-Caldwell, chair of the Senate Local Government and Taxation Committee, is considering an idea that would let entities that are dependent on property tax put a certain percentage of their budget aside during good times to draw on during bad times. He has not specified the amount.

Rice specifically mentioned cities and counties, but it could hypothetically include other entities dependent on property tax, which range from cemetery districts and highway districts to libraries and mosquito abatement districts.

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Jim Rice

“It’s more of a prudent type of measure to try to address what happens from time to time, and do it at a time when we’re not in the middle of a problem with a down economy,” Rice said. “It’s not that I expect one any time soon, but they periodically happen and we can’t predict the future.”

How would it work?

Rice said he has discussed the notion with a couple of mayors and some lobbyists, whom he didn’t name, and is working on the concept with Rep. Joe Palmer, R-Meridian, who is running for mayor of Meridian.

“We aren’t at the point of a bill yet,” he said. “I consider it my job, as the chairman, to see what issues are out there.”

Currently, such entities – particularly cities – don’t have any way of running a rainy-day fund, Rice said. Taxing entities can put money aside for specific projects, but not for general operational expenses. Entities are also allowed to raise property tax collections by up to 3% a year, and if they choose not to do so, they can “bank” that increase and come back to it later, which is called a “forgone tax.”

But aside from the fact that imposing a forgone tax means raising property taxes on people during a recession, forgone balances weren’t sufficient during the last recession, Rice said.

“They still were cutting police and fire positions, or not filling them, in many cities,” he said. “The worst time to raise property taxes is during an economic downturn.”

In addition, with the economy in good shape recently, some entities have drawn upon their forgone tax balance to pay for projects.

How the state does it

In contrast, the state is allowed to create rainy-day funds, or stabilization funds, to have for emergencies or economic downturns. According to Fiscal Facts, a budget document put out by the Idaho Legislative Services Office, the state Budget Stabilization Fund was created in 1984. In 2008, it reached its highest pre-recession level of $140.6 million, but the state drew upon it in 2009, 2010 and 2011, which essentially exhausted it.

Since then, it was not only replenished but its ceiling was raised from the previous 5% of the total general fund collections from the previous year. According to David Fulkerson, deputy administrator/state financial officer of the governor’s Division of Financial Management, the balance of the Budget Stabilization Fund as of Aug. 31 was $373.2 million.

The Public Education Stabilization Fund was created in 2004 and reached a pre-recession high of $112 million in 2008, but was drawn down to $11.2 million by 2011, according to Fiscal Facts. As of Aug. 31, the balance of the public education stabilization fund was $62.2 million, Fulkerson said. In addition, in 2010 the Legislature created the Higher Education Stabilization Fund. As of Aug. 31, it had a balance of $11.3 million, he said.

Because education has such rainy-day funds dedicated to its use, school districts would likely not be covered by Rice’s proposal. In addition, some school funding comes from the state, Rice said.

“Any time we’re talking about school district funding, we need to talk about those separately,” he said.

Meridian legislators warn about Medicaid costs

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Meridian legislators talked about the 2019 and 2020 legislative sessions at a Meridian Chamber of Commerce event. Photo by Sharon Fisher.

It’s only been a month since the Idaho Legislature adjourned sine die, but Meridian legislators are already looking forward to next year, particularly with respect to Medicaid expansion.

A number of West Ada legislators – all Republican, because Meridian has only Republican legislators – appeared on May 21 at a panel convened by the Meridian Chamber of Commerce.

Following a successful citizen-led initiative, the Legislature complied with a commitment Gov. Brad Little made during his State of the State speech to fund expansion of Medicaid to low-income working people. In the process, they added a variety of “sideboards” to the program, such as work requirements.

Several of these require approval of waivers by the federal Centers for Medicare and Medicaid Services (CMS), and the Legislature is waiting to hear about those. Rep. John Vander Woude said he expects to hear in about three months, with details to be settled by the beginning of the legislative session in January. Several requirements Idaho added have been approved for other states, so he is sanguine, he said.

However, Vander Woude and other legislators expressed unease about what the program will eventually cost. The budget for the Idaho Department of Health & Welfare has almost doubled in the time that he has been in the Legislature to $3.7 billion, he said, partly because more people keep signing up for Medicaid. Medicaid expansion was originally expected to apply to about 60,000 people, then 90,000, and he said he wouldn’t be surprised to see it hit 100,000.

“I still think Medicaid expansion could be the budget-buster for the state,” Vander Woude said.

While much of the cost for Medicaid expansion is expected to be covered by the federal government, that’s not guaranteed, legislators said. Medicaid expansion is currently funded 90% by the federal government and 10% by state government, but standard Medicaid is covered by the Federal Medical Assistance Percentages (FMAP) at a 70%-30% split.

But occasionally those percentages change, and every FMAP percentage point costs another $20 million, Vander Woude said. Moreover, Sen. C. Scott Grow said he was concerned Medicaid expansion would also revert to the 70%-30% rate.

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Mike Moyle. Photo by Sharon Fisher.

In addition, Rep. Mike Moyle pointed out that the Idaho Legislature had funded only six months of Medicaid expansion, and that it wasn’t clear where funding would come from for the rest.

Other major business issues covered during the discussion included transportation funding, a Chamber priority. Legislators pointed out that they had approved $90 million for the expansion of Highway 20/26 and funding for Highway 16, both in the Meridian area.

Some other items typically funded out of the transportation budget, such as the Idaho State Police, have been removed from that budget and paid for instead out of the general fund, which also pays for items such as education and human services. Fuel-efficient cars and cars that don’t use gasoline are making the current funding mechanism – based on the fuel tax and registration fees – untenable, legislators said.

Instead, the Legislature is considering options such as “ton-mile” taxes, where commercial vehicles would be assessed a fee based on their weight and the distance traveled, said Rep. Jason Monks. However, such taxes – and anything else assessed against commercial vehicles – would likely come back to consumers in the form of higher prices, he warned. Ultimately, he thinks it’s likely that transportation will start taking more money out of the general fund, he said.

Hemp was also not legalized by the Idaho Legislature this year, although the federal government has legalized it and Idaho is one of just two states that, for now, don’t allow it. (Nebraska, the other, is still considering it.) Vander Woude said it would likely be considered next year. Moyle noted the House passed it twice and blamed the Senate that the bill didn’t pass, adding that hemp dryers that could have been built in Idaho were instead being built in Ontario, Oregon.

The ABCs of Idaho education building funding

Willow Creek Elementary, a West Ada School District building that was constructed using plant facilities levy funds over a period of three years. Photo courtesy of Vallivue School District.

Constructing education buildings can be challenging enough, but funding them in Idaho can be even more difficult. While there are several methods districts can consider, none of them is particularly easy.

Impact fees

It might seem logical to have a developer contribute to the cost of constructing a new public school building. After all, if the developer is bringing new families to the area and profiting in the process, doesn’t that make sense? And it’s true that in a number of other municipal areas, such as roads, parks and public safety, communities are allowed to charge impact fees to developers to help fund future expansion.

But not schools. At least, not in Idaho, though some other states charge impact fees for schools.

Idaho’s impact fee law was enacted in 1992, according to the Idaho Legislature’s website, and the reason schools were left out of it in the first place is lost to the mists of time. While efforts have been made to add schools to the impact fee law, most recently in 2006 in response to an interim committee on property taxes, school impact fees didn’t make the cut. No significant efforts have been made to add them since.

“In general, the resistance to adding schools to impact fee statue was the thought that schools — on the surface anyway, setting realities of securing the votes aside — can run emergency levies, supplemental levies, plant levies and bonds,” said former Sen. Shawn Keough, R-Sandpoint, who was one of the sponsors of the 2006 bill and who retired in 2018 as Senate co-chair of the Joint Finance-Appropriations Committee. “In short, the thinking was that schools had tools to be used to address growth and didn’t need more.”

There was also the usual objection to adding any new taxing or fee authority, she added.


Sage Valley Middle School, in Vallivue. The new middle school that Vallivue will be able to build with its 2019 bond will be based on the same blueprint. Photo courtesy of Vallivue School District.

The primary way that public elementary and secondary schools are funded in Idaho is through bonds. As opposed to levies, which fund school operations, bonds can be used only for capital construction, typically last for 10 to 30 years and are guaranteed by the state so they have a low interest rate. Elections for school bonds can be held just four times a year — March, May, August and November. In contrast to many states, school bonds in Idaho, like other governmental bonds, must get a two-thirds majority to pass.

That’s a high bar, and a lot of school districts barely make it or don’t make it at all. Vallivue School District, for instance, passed a $65.3 million bond in March by a single vote.

“Every ‘no’ vote takes two ‘yes’ votes to counteract that,” said Joey Palmer, director of community relations for state and federal programs for Vallivue, which covers the rural areas of Nampa and Caldwell. “If we were playing basketball, the team that wants to build the school would shoot two-pointers and the team against gets to shoot three-pointers.”

It’s also challenging for school districts to get the word out. Districts are not allowed to advocate for bonds, but can provide factual information. They are also limited in how they can spend money on providing information, so expensive multiple mailings are likely out. But getting people to show up for meetings can be a challenge.

Two years ago, with a different vote, the district held a town hall. “We advertised like crazy,” Palmer recalled. “’Come to a town hall! You can ask our superintendent a million questions!’ We advertised that for two weeks. Print advertisements. Reader boards. Social media.”

And the result?

“One person attended,” Palmer said. “We had this huge auditorium, and it was all empty seats, and it was this sweet retired lady, who didn’t even have any children or grandchildren in the district, who thought she’d check it out.”

This year, Vallivue did something different.

Instead of town halls, the district used social media, including Facebook Live, to provide information and solicit questions, Palmer said.

Because the district is growing so much, it is in the enviable position of being able to raise money without increasing tax rates — or, in fact, even while lowering them. The number of new buildings and the increase in property value is enough.

“In 10 years, with all the new homes and businesses, our market value has gone up $1 billion,” Palmer said. “Our tax levy rate is the lowest it’s been in 15 years. People call me a liar, but we’re very transparent with all our finances. It’s a very fortunate position to be in as a district.”

However, that can also make explaining the bond challenging. According to the ballot, the school district was asking for permission to use $100 per $100,000 of assessed value of its existing tax rate toward construction. But a number of people told him that they had voted no because they assumed that meant they’d be charged an additional $100 per year.

“Ballot language isn’t always easy to understand,” Palmer said. “It’s written in legalese.”

Now, the school has $65.3 million for five projects, including a third middle school, renovations for its oldest school, security and technology updates for all the schools and land purchases for future schools.

“The last thing we want to do is build another school and there’s no land left to purchase,” Palmer said.

Plant facilities levies

Because of the high bar bonds require, some districts use plant facilities levies. Unlike bonds, a plant facilities levy is typically applied every year for 10 years and is funded by a bank, so it has a slightly higher interest rate than a bond. However, it requires only a 55 or 60 percent majority vote to pass, depending on the debt level of the taxing district. Some districts — such as Vallivue, which needed two tries in 2017 to pass one by just four votes — use plant facilities levies for maintenance projects, such as new roofs and parking lots.

The West Ada School District, which covers Meridian and is the largest in the state, has had a plant facilities levy since 1972. It is renewed every 10 years, typically for maintenance and improvements, said Eric Exline, chief communications officer.

But depending on how the ballot question is worded, plant facilities levies can be used to construct new buildings as well, Exline said. For example, the district in 2007 included “construction of new facilities” in its ballot wording for a $20 million plant facilities levy. “We used a part of that $20 million, over a three-year period, to build Willow Creek Elementary,” a $16 million project, he said. The district built it in sections so that it could use some of the levy money for maintenance.

Similarly, the district built Renaissance High School, inside the former Jabil plant, over a 10-year period. It supported 800 students while construction was going on.

“We just finished the last phase this last year,” Exline said. “We kept needing to add some more space.”

West Ada’s current plant facilities levy is for $16 million, but didn’t include the “construction” language, so it’s just being used for projects such as adding on to existing schools, and maintenance such as roofs, parking lots and paint.

Plant facilities levies for constructing new schools were particularly useful during the recession, but now that the economy has recovered, the district is back on a two- to three-year cycle of running bonds and turning to the plant facilities levies for maintenance.

“Our community has been pretty supportive of bonds,” Exline said. “Since 1996, only one has failed.”

Charter schools

Future Public School. Photo courtesy of Bluum.

Charter schools — which are public schools, not private, and are typically geared to a specific subset of the community — have a different challenge. By Idaho law, they aren’t allowed to bring bonds or levies for a vote of the people. Instead, they get a certain amount of funding from the state. That, combined with grants, help from nonprofit organizations, and so on, helps them construct their facilities.

“Until 2013, charter school facilities had to be funded completely out of the general education allocation from the state,” said Marc Carignan, chief financial officer for Bluum, a nonprofit organization that has helped fund and run a number of Idaho charter schools, including Future Public School in Garden City. “This is the struggle that we have. Public charter schools are not taxing entities.”

In 2013, the law was amended to allow an allocation of some additional state department of education funds for charter facilities, which amounts to about $390 per student, Bluum said. Between that, some maintenance funding that all public schools receive and allocation of about $445 per student, charter districts end up receiving about $1,200 per student, he said.

“What that’s forced us to do is to be really thoughtful about how we build school facilities,” Carignan said. For example, Future Public School partnered with the Garden City Boys & Girls Club. Because the club wasn’t used during the day, the school could use its gym and cafeteria. Because the school isn’t used during the day, the club can use the school’s classrooms for its programs. The result is that Future Public School spent $7.6 million for 576 students, or about $13,000 per seat, which is much less than comparable schools in the Treasure Valley spent, he said.

The downside was the expense for land at that location — about $800,000 for about one acre, Carignan said. By comparison, an 11-acre parcel in Caldwell that the company is looking at for a charter school in two years is $339,000.

Another example is Alturas International, in Idaho Falls, which renovated a former district public school for $7.2 million for 538 pupils.

“The cost is about the same per seat, but we didn’t have to make any compromises on the gym,” Carignan said.

Similarly, Gem Prep in Pocatello, another Bluum project, is going to be located in an old Sears store.

“That’s going to be a great deal,” Carignan said.

Because the building was so inexpensive, the total cost including renovations will be less than $12,000 per seat, he said.

The Idaho Legislature considered a number of bills this session to help with charter school funding, such as SB 1180, which adopted a “moral obligation” bond funding mechanism. That meant the state would act as a “backstop” in case a charter school missed a loan payment.

Another bill, HB91, allowed municipalities to not charge charter schools the impact fees for roads and parks that a typical commercial construction project would pay. District public schools are exempt from such fees because it would basically be one government taxing another, but charter schools, even though they’re also primarily funded by the state, had never been exempted from such fees. Some municipalities exempt charter schools from the fees anyway.

Carignan would like to see charter schools be allowed to participate in bond issues. In some other states, school districts either “must” or “may” allow charter schools to participate, he said. That could offer a benefit to both, he said.

“Let’s say a school district is having trouble passing a $100 million bond issue,” Carignan said. If the charter school needs $10 million, the district could put forth a $110 million bond, agreeing to share the proceeds, and the charter school could leverage its base of parents and taxpayers to vote, he said.

“It can be a determining factor in whether the bond will pass,” he said.

There’s also the question of what would happen to the building should the charter school shut down.

“Legally, I suspect the building would be the property of the district,” Carignan said.

Alternatively, another charter school could be recruited to run the new school, he said. To reduce the risk of that happening, the program could be limited to charter schools that had been around and successful for several years, he said.

Higher education

Idaho’s public colleges and universities have the same problem to deal with, though they have a few more options.

For example, colleges have donors who can contribute funding. Just look around Boise State University (BSU) at how many buildings have “Micron” in the name. There’s the Micron Center for Materials Research (part of the Micron School of Materials and Engineering), the Simplot/Micron Academic Success Hub, the Micron Business & Economics Building and the Micron Engineering Center, as well as the Appleton Tennis Center, named after the late Micron CEO.

Similarly, the College of Eastern Idaho received $1.73 million from the William J. and Shirley A. Maeck Family Foundation to undertake the college’s first renovations of the former Eastern Idaho Technical College campus. The J.A. and Kathryn Albertson Foundation donated $2 million in December to the Idaho State University (ISU) College of Technology to help renovate a building on the Pocatello campus to consolidate some of its career technical education programs, and William and Karin Eames donated $2.5 million.

All this can take awhile. For example, the University of Idaho has been working on the Idaho Center for Agriculture Food and the Environment (CAFE) for 15 years, and has just gotten to the point of purchasing land, which it announced in February. The university will pay $2.5 million, and the Idaho Dairymen’s Association is contributing $2 million toward a 540-acre parcel, along with another parcel donated by the seller. But it’s a $45 million project, and the university isn’t saying when it will be completed.

Colleges and universities can also make arrangements to lease back buildings that are constructed by other organizations, such as the BSU Honors College, constructed and managed through a real estate investment trust specializing in student living facilities. BSU will own the property in a little less than 50 years.

The University of Idaho is funding its $46 million Idaho Central Credit Union Arena using a $10 million donation from ICCU — hence the name — and loaning itself $29 million from reserve funds, which it expects to pay back with donations and fees.

And, as with elementary and secondary schools, state colleges and universities can use bonds and plant facilities levies, with the same voting requirements.

Permanent Building Fund

In addition, the state’s Permanent Building Fund can contribute money toward buildings at colleges and universities, though the schools need to compete for that funding and it doesn’t always pay the entire cost. The Permanent Building Fund, which few other states have, was formalized in 1961 as a permanent source of funding for state buildings at $10 per filed tax return, said Raymond Pankopf, director for architecture and engineering services for the University of Idaho.

“That $10 in 1961 has never been increased,” Pankopf said, noting that in present-day dollars it would require $84 to keep up. In addition, the Permanent Building Fund has been supplemented from other sources, such as cigarette tax money, the liquor tax and an annual contribution from the lottery, increasing the total to about $40 to $50 per return – but still not up to $84.

“We have the fund, and it’s nice to have a permanent fund, but resources are very tight and there is no appetite to increase it,” he said.

Other agencies are also dependent on the fund. They include the Idaho State Police, the Department of Corrections and state hospitals, as well as state-owned buildings in the Capitol Mall, Pankopf said.

The money is managed by the Permanent Building Fund Advisory Council, a five-member board appointed by the governor. It includes one state representative, one state senator, one representative from the finance and banking community, one representative from the general contracting community and one at-large member, Pankopf said.

Altogether, the fund typically generates around $35 million per year, which is generally split up into thirds. One-third goes for operations, maintenance and repair of the Capitol Mall. About a third goes into alteration and repairs for other state-owned buildings. The final third goes into major capital, which is where the colleges and universities come in. That third amounts to about $10 million to $13 million per year, Pankopf said.

The breakdown of the funding varies from year to year.

“In the 2018 Legislature, the general thought was, we won’t do new buildings, but take care of what we have,” Pankopf said. Consequently, the majority of the money was put into alteration and repair.

Typically, colleges and universities can’t expect the Permanent Building Fund to pay for an entire building.

“Our experience at the University of Idaho is we will never see a building fully funded from the Permanent Building Fund,” Pankopf said. “We can generally count on partial funding or seed funding.”

For example, in 2017, the Idaho Legislature appropriated $10 million from the state’s Permanent Building Fund to help finance U of I’s CAFE project, with an additional $5 million investment anticipated as the project progresses.

“We often will see major capital funding in a year, and then it may skip a year or two before it’s our turn to see major capital money again,” Pankopf said.

In addition, Permanent Building Fund money is generally available only for general education funding, such as a classroom or a college, and not for auxiliary facilities, such as bookstores, residence halls or athletic facilities, Pankopf said.

Recently, the University of Idaho received $2.4 million for a major renovation to house the WWAMI program, a multi-state medical education program hosted by the University of Washington to serve students from Washington, Wyoming, Alaska, Montana and Idaho. The Idaho students are taught on the U of I campus for the first three semesters before going to Seattle for a semester. The facilities needed to be expanded because the Legislature doubled the number of seats it funded for the program, from 20 to 40, Pankopf explained. In addition, the school had to construct a new anatomy lab because the one it had been using, at Washington State University in Pullman, was moved to Spokane.

The Permanent Building Fund was also budgeted to contribute $10 million toward a health sciences building at the College of Western Idaho (CWI) community college. But if a school can’t raise the additional money required for the building, as with CWI, then it doesn’t get the state money.

CWI has been particularly challenged in this area. The community college, founded in 2007 to serve Ada and Canyon Counties, has been operating primarily in leased buildings since 2009. Since then, it has run bonds and plant facilities levies a number of times to, among other things, construct a health sciences building. Those attempts included $180 million in November 2016 and $39 million in November, an effort that fell 135 votes short of the required 55 percent. At this point, CWI’s board has thrown in the towel on the measure, at least for May.