Idaho Schools' Woes Balemd on Tax Limitations
Moscow, Idaho--The president of Idaho's Board of Education has cited Idaho's 1978 property-tax-limitation initiative, modeled closely after California's Proposition 13, as perhaps the leading reason for the state's present education woes.
In an impassioned speech before the Idaho legislature's Joint Finance-Appropriations Committee, Cheryl Hymas, the board's president, said that since the initiative was passed four years ago, needed repairs and purchases have been put off; classes, teachers, and school activities have been cut; faculty and staff vacancies have been left unfilled; and teachers' salaries have continued to trail the average Idaho salary by more than a third over the last decade.
The initiative, known as One Percent, has had an enormously negative effect on education, she said, because it has severely limited the amount of local revenue available for public-school support. As a result, she pointed out, the board now finds itself involved in crisis planning rather than setting long-term goals for the state's schools.
Full Effects Delayed
Mrs. Hymas noted that the legislature has been successful in delaying the full effects of the initiative on the public schools by shifting some $100 million from the state's general fund over the past three years to replace the lost property-tax support. "In retrospect," she told committee members, "it might have been better to let the public feel the full effects of the One Percent."
According to Alan Dornfest, a tax-policy specialist on the Idaho Tax Commission, carrying out the initiative as passed by the voters should have resulted in a 20-to-30-percent loss for all districts relying on property-tax revenues.
As originally worded, the One Percent initiative proposed by the Idaho Property Owners Association called for restricting the property tax on any taxable property to one percent or less of the actual 1978 market value of the property. Furthermore, it stated that the actual market base was not to increase more than two percent per year. In addition, the initiative prohibited the legislature from increasing property taxes and required that all other tax-raising bills be passed by a two-thirds vote.
Because One Percent was an initiative rather than a constitutional amendment (like California's Proposition 13), the Idaho legislature was charged with carrying out the intent of One Percent but was left free to change the wording, which was declared unconstitutional in its original form by state lawmakers.
In interpreting the initiative, the 1979 legislature chose a compromise route, which phased in provisions of the act over two years to ease the state's adjustment to the tax-limitation mandate.
This compromise involved two actions by the legislature: It restricted all property-tax collections to 1978 levels, thus freezing local budget expenditures, and it provided immedi-ate tax relief by lowering the maximum allowed school tax by 11 mills. The latter provision had the biggest potential impact on schools in 1979, the first year of the phase-in period.
Property Taxes Reduced
These two legislative moves produced "the greatest reduction in property taxes statewide in Idaho's history," said a report from the Associated Taxpayers of Idaho, a statewide organization of taxpayers playing a watchdog role over all tax matters.
Like California lawmakers, however, the Idaho legislature provided other funding to prevent the chaos in public schools that might have resulted from this sudden loss in local revenue. Unlike California, however, Idaho--whose constitution mandates a balanced budget--had no surpluses from which to provide an increase in state aid.
The past three legislatures, covering the period from 1979 to 1981, chose instead to draw from the state's general fund, giving a large portion of general-fund increases to public schools and cutting back or eliminating other programs that depended on these revenues. Higher education programs were among those on which these cutbacks took their toll.
Seventy-five percent of the public schools' budgets this year came from the state's general fund, up from only 18 percent in 1965 and 45 percent in 1977. According to figures provided by the taxpayers' association, state aid to public education increased 95 percent between 1974 and 1979. Gov. John V. Evans is recom-mending an 11-percent increase in the public-school budget for 1982, even though he admits general-fund revenues are increasing by only 9 percent.
But schools can no longer depend on the general-fund solution. As Governor Evans has indicated in several speeches, the fund is inadequate to meet revenue losses from known and anticipated federal cutbacks and from the state's depressed economy, caused by high interest rates and the shutdowns in major lumber and mining industries. And further cuts in other state programs cannot be made, he added, without severely damaging "Idaho's quality of life."
The Governor said repeatedly last month that a tax increase would be unlikely, especially in an election year. However, his State-of-the-State address last month included a proposal to increase the state cigarette tax from 20 cents to 25 cents in order to restore some funding to programs cut earlier by the legislature.
'Recovery in 1984'
Rather than raising taxes, he said, he would prefer to "create a very slim, trim, efficient state government--as efficient as we can possibly make it--and ride it through for this year, and then see a recovery in 1984."
"Things will be brighter," he predicted. "But I think we are just going to have to bite the bullet and hold it down until we see a recovery in the economic situation nationally."
Meanwhile, some schools districts have already gone on the offensive, and have sought to allay the impact of One Percent by persuading local voters to override tax limitations and approve supplemental levies--a practice permitted under the bill. Of the 46 such elections held last year, 37 were successful, and the dollar amount levied rose by 20 percent, thereby adding $11.5 million to public-school support.
But the trend in "override elections" seems to be on the wane. In 1980, 95 percent of such elections were approved by voters, compared with 80 percent in 1981.
Moreover, a telephone survey conducted last fall for the governor's office by the Public Policy Resource Center of Idaho State University confirms that Idaho voters follow the national trend favoring less dependence on property taxes.
Only 7.3 percent of the voters responding to the poll said they would increase property taxes if a tax increase were necessary. On the other hand, 54.3 percent said the shift should be to state funds.
Though Governor Evans has expressed doubts that a tax increase will be passed in this legislative session, the survey results show 58.1 percent of those responding would support an increase in the state's 3-percent sales tax and 14.1 percent would back an income-tax increase.
Several education groups--including the Idaho Education Association, the Idaho Association of School Administrators, the Idaho Association of School Boards, and the state's Board of Education--are currently pushing the legislature for such tax increases. The Idaho Property Owners' Association, the organization behind the One Percent initiative, says it favors increasing the state sales tax, but on the condition that all property-tax support be withdrawn from the schools.
Meanwhile, the opinions of citizens across the state vary on what impact the property-tax limitation measures have had on public education. The governor's survey showed one-third of the voters think the initiative had "no effect" on Idaho education, and one-fourth "don't know" what effect it had.
No Adverse Effects
Moscow's school board chairman, Jack Kaufman, said last week that his district has "not felt one single adverse effect." He admits the effects may yet have an impact, but speculates that "a lot of the gloom is based on the assumption things were going to go forward as they have in the past."
"In inflationary times," he said, "people should not expect teachers' salaries to continue rising by 10, 15, and 18 percent, as they have here over the last three years. A lot of the things we do in the district are just because the money is there," he added, citing as an example the 20 microcomputers the Moscow district has purchased for about $52,000. "Will we get that much value from them?" he asked.
Mrs. Hymas pointed out last week, however, that Moscow has one of the three highest override levy rates in the state. "Most dis-tricts have wasted very little," she insisted.
Mrs. Hymas said she is sorry that Idaho, one of the three states nationally to enact a major property-tax limitation measure, was so quick to follow California's example in Proposition 13. (Massachusetts' controversial Proposition 2 became law last year.)
"Idaho is one of a handful of states that is growing in population and in the number of school-age children," Mrs. Hymas noted. "We have more students per taxpayer than most states," she added. "We should be gearing up and instead we are gearing down.
"With cuts, the schools will never be as good again as they are now," insisted the state board president. "We've lost so much by not doing timely maintenance, by not making timely purchases, and by letting the morale of our teachers drop, that even with immediate full funding, it would be decades before we could catch up."