The Idaho Legislature has been really good about taking away revenue sources from local governments.
That way, the legislators can claim they lowered your taxes. We haven't notice them taking a lot of the state's revenue sources away, however. If anything, if you consider fees to be a sort of "user tax," they've actually approved several tax increases at the state level. They just hid it as a fee hike.
But at the local level, where much of the nuts and bolts of government take place, revenue is not only down because of the lingering effects of the Great Recession, it's down because the legislature keeps taking funding sources away from local governments -- a fact that becomes particularly painful this time of year, when local governments are putting together their budgets.
When Jim Risch was governor, the legislature removed the operations and maintenance levy from school districts, promising to make up the difference from the state. In fact, the state never did make up the difference entirely. When the Great Recession hit in 2008, the state chopped everything, including funding to public schools. In fact, it continued to reduce spending to public schools, which today is still well below the 2008 levels.
Meantime, more and more of the money coming from the state to the schools came with strings attached, allocated to specific programs and uses. The famous local control the legislators like to talk about so much was fading fast. School boards had less and less "wiggle room" to innovate. This year, legislators claimed a 2.2 percent increase in state funding for local schools, but nearly half of that was allocated to programs that were part of the famous "Luna Laws" that the voters rejected last fall. Don't worry, the legislators know better than the local voters, so they quietly passed large chunks of those laws again while all the focus was on the personal property tax fight.
The end result of the legislature's financial animosity to local school districts and local school boards was to force local voters to approve emergency supplemental levies to keep districts from being forced to cut basic programs. At least 80 of the 115 school districts in the state now have those levies in place, and they look to be semi-permanent unless the legislature starts deciding public education is something important again, instead of just a whipping boy.
But the legislature wasn't done whipping local governments, which have been struggling mightily to make ends meet since the Great Recession.
Cities and counties have been clobbered, too.
Just as the economy was turning around, the legislature proposed cutting the personal property tax, a move that might have made sense to try in a booming economy, when local governments, from cemetery districts to cities to counties, could afford it. But it made no sense just as local governments were starting to recover. The light they thought they saw at the end of the tunnel was the headlamp of a legislative train about to wreck their financial futures.
Losing that revenue source would have been a total disaster for local governments. In the end, the legislature conceded that point and, since its members couldn't admit total error, only partially reduced the tax (about $28 million to $30 million statewide, of which it promised to make up, this year only, about $20 million from state funds -- almost all with strings attached).
It meant local governments would only have to make small cuts, not catastrophic large ones. But they were cuts again, and if it is possible to die from a thousand cuts, then the wounds inflicted over the last five years have bled deeply.
But what's actually happening is that the end result of this mythical "fiscal restraint" is that the local government infrastructure is slowly aging and not being fixed, maintained or replaced. The piper will come calling for his payment some day soon -- and that day of reckoning is going to be very expensive. Somehow, the legislature can't see what any blind man can see in an instant. These are "savings" that are going to cost us dearly.
The first step is to freeze any further reductions or reallocations from the local to the state level of the funding sources local governments rely on. The second step is to slowly ease the caps on budget and levy increases. For example, the 3 percent cap on budgets (and therefore levies) could be raised to, say, 3.5 percent. Since local governments are closest and most responsive to the people (the turnover rate is much, much higher than that of state and federal elected officials), nobody is going to go crazy raising taxes beyond the minimum necessary. But they will get enough to maintain basic services and keep the infrastructure from crumbling.
The legislature needs to do more than pay lip service to the value of local control and local governments. They need to return the power and the power of the purse back to the people closest to the need, and trust them to use it wisely. We think they'll do a better job than the legislature has.
-- Kelly Everitt