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Bond bill to hear public testimony, school maintenance funding in question

Posted at 4:36 PM, Feb 09, 2022
and last updated 2022-02-09 18:36:11-05

BOISE, Idaho — On Friday, Idaho lawmakers will hear testimony on new legislation that would force taxing districts to wait nearly a year before rerunning a failed bond measure.

A reboot of two unsuccessful bills from past legislative sessions, House Bill 512 looks to prohibit local government units from putting the same bond measure on more than one ballot per year.

Both pieces of former legislation were unable to pass in the Senate State Affairs Committee.

Related: Bond bill legislation returns, aims to limit taxing districts

Bond measures are ballot initiatives proposed by governments that collect additional property tax revenue for cities, counties and school districts. Bonds allow taxing districts to go into debt, which voters repay over time through a temporary increase in property taxes. Bonds require a two-thirds majority vote to pass.

Rep. Heather Scott, R-Blanchard, has repeatedly proposed the legislation because she believes it would "target aggressive taxing districts."

"When a bond is run in a community, if that bond fails and the voters say no, there needs to be a period of time before they can rerun a bond of a similar type," Scott said in committee earlier this month.

Currently, when a bond fails, taxing districts can rerun them during the next election. If passed, HB 512 would limit the same bond initiative to one ballot per year – which could cause districts to delay projects like building a new school facility.

Related: Education advocates push for new way to fund school construction costs

Per the Idaho Constitution, the state must provide for a "uniform and thorough system of public, free common schools." In 2005, the Idaho Supreme Court found that the legislature was failing its constitutional duty because the state's education "funding system is simply not sufficient."

According to the Idaho Office of Performance Evaluations' report in late January, about 60% of school district administrators believe their facilities are "fair" or "poor" conditions.

During OPE's presentation to lawmakers, senior evaluator Casey Petti said it would cost approximately $1.3 billion to bring school facilities up to "perfect" condition.

Idaho Office of Performance Evaluations

Bonds are currently the primary way schools pool funding for major investment projects, Petti said. However, he said that many bonds have failed to clear the ballot box over the last decade.

"We looked at bond passing rates between 2011 and 2020 to try and determine if there any influence there," Petti said. "From this time period and there were 120 bond proposals, and of that, 49 passed, so roughly 41%."

While he said that voter fatigue from having to vote almost annually on bonds and levies might be a factor in past initiatives' demise, Petti believes the two-thirds majority threshold is the more significant challenge.

Not every state requires 66.7% voter approval to pass a bond.

According to the OPE report, several surrounding states – Montana, Oregon, Nevada, Utah and Wyoming – require only 50% voter approval on bond measures. Washington requires 60% voter support.

"With a lower bond threshold of 60%, 72 (of the 120 proposals) would have passed. At a simple majority of 50%, 97 of the 120 bonds would have passed," Petti said. "It's pretty conclusive that the bond threshold poses a barrier to school bonds passing."

During the presentation, Rep. Steve Berch, D-Boise, argued that more Idahoans could see some property tax relief if the state financially supported educational capital projects.

"If the governor takes the lead on the state funding this maintenance, that is a really good way to lower prop taxes," Berch said. "If the state resumes its constitutional responsibility to adequately fund this stuff and stop assuming that bonds and levies on an annual basis are okay."

Nampa Education Association President Brian Coffey says school districts are aware of how levies and bonds affect property taxes and would do more to reduce them if they could.

"Property tax is, of course, a huge buzzword all over the state right now," he said. "So, districts are very sensitive to that. Certainly, in my neck of the woods, taxes are a four-letter word."

Testimony on the HB 512 is scheduled for Friday. The public can sign up to speak here.