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House committee passes bond legislation, heads to floor

Posted at 4:18 PM, Feb 11, 2022
and last updated 2022-02-11 18:18:15-05

BOISE, Idaho — After a heated committee hearing Friday morning, lawmakers passed new legislation that would force taxing districts to wait for 11 months to rerun a failed bond measure.

The vote, much like the testimony on the bill, was divided.

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.

House Bill 512would ban local government units from putting the same bond measure on more than one ballot per year.

Republican Rep. Heather Scott of Blanchard proposed the legislation to reboot two unsuccessful bills from past legislative sessions that did not pass in the Senate State Affairs Committee.

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

Scott repeatedly proposed the legislation because she believes it would protect voters from "aggressive taxing districts." Scott said a district becomes "aggressive" when it resubmits bond measures that failed to receive a super majority,or 66.7%, of the electorates' approval.

On Friday, eight people testified on HB 512 – three in favor, five against.

Several were concerned the legislation would financially burden school districts that rely on bonds to maintain or expand their facilities.

Alicia Abbott, a Sandpoint resident – and Scott's constituent – said the previsions in HB 512 would "handcuff rural schools who are struggling in the face of underfunding." She said the West Bonner County School District has experienced "regular and frequent disinformation campaigns against public education," causing them to rerun failed bonds and levies.

"Our rural schools are dependent on these bonds and levies right now. Twenty-five percent of the budget in West Bonner County School District is covered by a levy that has to be run twice every two years," Abbott said. "This school will close if we can cut their access to funding curriculum or maintenance."

Republican Rep. Julianne Young of Blackfoot objected to Abbott's statements and advised her to "speak to the issue itself instead of impugning motives."

"The fact of the matter is HB 512 will hurt rural schools the most. Rural schools are the heart of the state, and we cannot deny them access to funding in their local communities until all of their needs are met by the legislature," Abbott said. "This measure hamstrings local communities, and they know that they will have to close their schools if their access to funding in their local taxing districts becomes harder to obtain. Rural schools are not aggressive taxing districts. They are on the brink of closure."

While Scott said her legislation isn't intended to specifically target school districts, if voters feel they are acting "aggressively," the lawmaker feels the state should act.

"If there are schools and school districts that are identifying as aggressive taxing districts when maybe that's something we need to look at — our schools and how they're funding," she said. "Schools are public servants and they're supposed to work for the people."

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. This could cause districts to delay projects like building a new school facility.

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

Scott believes the 11-month waiting period provides taxing districts time to regroup and connect with the community about why the bond failed so that it could pass the following year.

"It seems like there are some bad actors. That's why we have to create laws is to stop aggressive taxing districts. Those are they're trying to take advantage of the citizens," she said. "I like to call this bill the 'No means no, at least for a year' bill. That's how I see it."

However, others pointed out waiting a year to rerun a bond intended to fund new construction could cause districts to increase the monetary ask due to the inflated materials costs.

"From where I stand, I don't believe this bill is needed and can have unintended consequences to the districts and patrons in their ability to provide adequate facilities for instruction," Idaho Falls resident Aaron Johnson said. "We've seen a 25% overall increase in construction costs over the past year alone...There are those who will say sometimes waiting is a good thing because prices maybe will go down. That's almost never the case."

Those who favored the bill said it could help provide some property tax relief. Idaho Falls resident Holly Stone said she and her husband are on a fixed income. Despite living in their home for three decades, Stone said the couple is increasingly concerned about their "skyrocketing" property tax bill. She believes their only protection from the tax burden of bond initiatives is the supermajority requirement to pass – but that isn't always reliable.

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

"The more times a taxing district runs a bond, the more likely it is that they are to win, regardless of the will of the voters," Stone said. "And I'm telling you that our ability to be homeowners here in southeast Idaho is in danger because of skyrocketing tax, property taxes. I see House Bill 512 as additional protection so that taxing districts will consider much more carefully what they propose before they jump in and ask for the moon."

Brian Stutzman from Ammon said a taxing district in his region ran a bond nearly every election last year due to its repeated failure. He sees HB 512 as a mechanism to "weed out" the bad actors and leave the responsible taxing districts alone.

"(The bond's cost) is borne by the taxpayer, not by the taxing district who wants to run it," Stutzman said. "If they know that they have to wait, they're going to be more responsible, to begin with. And again, these are just a few bad actors. I think most taxing entities are good actors."

The House State Affairs Committee passed HB 512 in a 10-3 vote. It now heads to the entire House body for debate.