The Haves and Have-Nots in Idaho Education
The Haves and Have Nots of Idaho Education. The Haves: commercial developers, builders, businesses, agricultural property. The Have Nots: residential property owners, school districts, Idaho’s students.
The year 2020 in Idaho Education. We are either dead last or 2nd to last in the nation for educational funding. 95% of our school districts haven’t had textbooks that go home with students for decades now. A sizable number of school districts throughout the state run on 4 day weeks. Lastly, the “Supplemental Budget Levy” where school districts beg their constituents for money is now so ubiquitous that it’s really a joke to call it “supplemental” at this point. While most of us just accept this as reality and don’t think about it much, it’s good to ask the question, How did we get here and what does this mean?
How did we get here? In 2006, in a special one day session of the legislature, how we fund education in the state was dramatically changed. Then appointed Governor Jim Risch pushed through House Bill #1 that granted $260 million relief in property taxes that had traditionally gone to schools. At the same time, the legislature raised the sales tax from 5 cents/dollar to 6 in order to replace the money that was lost. First, there was a $50 million shortfall in revenue right from the beginning. (Cut $260 million and replace it with $210 million; the idea was that any shortfall could be made up for using local 'supplemental' levies.) In addition to that, when the Great Recession came along, increased reliance on sales tax (that is directly linked to the economy) caused a dramatic reduction in the funding schools received...one that hasn’t really been made up for to this day. Kevin Richert wrote an article in 2016 describing this in detail in the Idaho Education News. Even though the legislature has been considering a new funding system since 2019, we still live under this system. Anyone who has been here for longer than 6 months is aware of the continuous levy bonds that run throughout our state: In 2009, districts raised $114 million through levies, and in 2019 that number had climbed to $214 million...generally it increases every year.
How does this affect us? In our system, impact fees that are traditionally levied to builders and given to schools are no longer used. In addition to this, in the old system about 50% of the tax burden was born by commercial properties, but that is no longer the case. While the bulk of the property tax burden has shifted away from businesses and commercial developers so they’ve seen their taxes decrease, residential property taxes have increased to make up the difference. Under the system as we have it, especially when you consider how much schools now have to rely on supplemental levies, the tax burden of funding schools is now squarely on the back of residential property owners in local communities. This has affected us in several ways: 1.) It’s now cheaper for builders to build homes because they don’t pay impact fees. One could argue that this helps fuel our recent rampant growth. 2.) Non-commercial property owners continue to see their taxes go up, especially because residential property is the supplemental levy’s only source of income. 3.) Because supplemental levies don’t pass evenly throughout the state, district funding becomes increasingly variable: some districts have significantly more money for their schools than others.
What does this mean? We are hearing the call to reform this system more and more: Reclaim Idaho, the organization that put expanding Medicaid directly on the ballot bypassing the state’s legislature, has been getting a petition signed to put this issue on the ballot. Last year, Caldwell Senator Jim Rice put forth a proposal to raise the sales tax one more cent in order to wean our state off of supplemental levies. Neither of these measures has come to effect yet. I don’t know what the answer to this problem is, but it seems clear that the shift in funding that came about in 2006 really hurt our state. And we’ve lived with this system for 14 years now. Residential taxpayers are now forced to bear a much higher burden than they used to, and worse, the amount of tax dollars districts receive-and this has a direct impact on the quality of education for students in these districts-is increasingly varying. This means that we have created a system of haves and have nots in our system. In education, all the forces in the universe work together to link zip code to the quality of one's education. Usually, local and state governments fight these forces, but heavy reliance on local levies actually accelerates this. In short, the link between zip code and what is spent on education is increasing not decreasing.
How did we get here? In 2006, in a special one day session of the legislature, how we fund education in the state was dramatically changed. Then appointed Governor Jim Risch pushed through House Bill #1 that granted $260 million relief in property taxes that had traditionally gone to schools. At the same time, the legislature raised the sales tax from 5 cents/dollar to 6 in order to replace the money that was lost. First, there was a $50 million shortfall in revenue right from the beginning. (Cut $260 million and replace it with $210 million; the idea was that any shortfall could be made up for using local 'supplemental' levies.) In addition to that, when the Great Recession came along, increased reliance on sales tax (that is directly linked to the economy) caused a dramatic reduction in the funding schools received...one that hasn’t really been made up for to this day. Kevin Richert wrote an article in 2016 describing this in detail in the Idaho Education News. Even though the legislature has been considering a new funding system since 2019, we still live under this system. Anyone who has been here for longer than 6 months is aware of the continuous levy bonds that run throughout our state: In 2009, districts raised $114 million through levies, and in 2019 that number had climbed to $214 million...generally it increases every year.
How does this affect us? In our system, impact fees that are traditionally levied to builders and given to schools are no longer used. In addition to this, in the old system about 50% of the tax burden was born by commercial properties, but that is no longer the case. While the bulk of the property tax burden has shifted away from businesses and commercial developers so they’ve seen their taxes decrease, residential property taxes have increased to make up the difference. Under the system as we have it, especially when you consider how much schools now have to rely on supplemental levies, the tax burden of funding schools is now squarely on the back of residential property owners in local communities. This has affected us in several ways: 1.) It’s now cheaper for builders to build homes because they don’t pay impact fees. One could argue that this helps fuel our recent rampant growth. 2.) Non-commercial property owners continue to see their taxes go up, especially because residential property is the supplemental levy’s only source of income. 3.) Because supplemental levies don’t pass evenly throughout the state, district funding becomes increasingly variable: some districts have significantly more money for their schools than others.
What does this mean? We are hearing the call to reform this system more and more: Reclaim Idaho, the organization that put expanding Medicaid directly on the ballot bypassing the state’s legislature, has been getting a petition signed to put this issue on the ballot. Last year, Caldwell Senator Jim Rice put forth a proposal to raise the sales tax one more cent in order to wean our state off of supplemental levies. Neither of these measures has come to effect yet. I don’t know what the answer to this problem is, but it seems clear that the shift in funding that came about in 2006 really hurt our state. And we’ve lived with this system for 14 years now. Residential taxpayers are now forced to bear a much higher burden than they used to, and worse, the amount of tax dollars districts receive-and this has a direct impact on the quality of education for students in these districts-is increasingly varying. This means that we have created a system of haves and have nots in our system. In education, all the forces in the universe work together to link zip code to the quality of one's education. Usually, local and state governments fight these forces, but heavy reliance on local levies actually accelerates this. In short, the link between zip code and what is spent on education is increasing not decreasing.
Our state’s educational clause states that, “The stability of a republican form of government depending mainly upon the intelligence of the people, it shall be the duty of the legislature of Idaho, to establish and maintain a general, uniform and thorough system of public, free common schools.” When you look at the system we have today, it’s definitely not general, uniform, or thorough, and the group that should fix this system is the same one that created it in 2006.
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