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Boise mayor lobbies for city sales tax

Boise mayor lobbies for city sales tax

June 5, 2010
June 5, 2010

Boise Mayor Dave Bieter wants approval for a city sales tax so more can be spent on transit projects and education.

In Thursday’s State of the City address, Bieter called on Gov. Butch Otter and the Legislature to give cities the power to invoke local-option sales taxes. He said if Boise had such authority, a one-half percent sales tax could generate as much as $22 million to fund Valley Ride projects, and a commuter rail transit system between Ada and Canyon counties. Some of the money would go to funding research grants at Boise State University, College of Western Idaho, and other colleges.

But according to Wall Street Journal economics writer Stephen Moore, who spoke recently at the Idaho Freedom Foundation’s first annual birthday celebration, raising taxes would be the worst thing the city could do right now. He said governments have only three ways to generate revenue: printing money, borrowing, and raising taxes, and since city governments can’t print money, that leaves only two options. “If they borrow money, that’s just a future tax increase. Taxes are the ultimate way to hurt the economy, by taking money out of the private sector. Borrowing is just a promise to raise taxes later.”

A Republican candidate for the Idaho House of Representatives doesn’t like the idea of giving more taxing authority to cities, especially when his would-be constituents would be the ones shouldering the heavier tax burden. “I’d be much more interested in hearing his (Bieter’s) plan on how he’s going to balance his budget and reduce the tax burden on the citizens of Boise, rather than some new form of taxation to pay for his pet projects,” said Ralph Perez, who’s running in House District 16, which covers Garden City and northwest Boise. The city reportedly is looking at a $4 million budget deficit, but taxpayers have not been told how the city plans to address that shortage.

Perez thinks giving cities local-option sales tax authority would be a nightmare for taxpayers. “It’s the camel’s nose under the tent. You give them that authority, yeah, it’s a half-percent today, but it won’t stay a half-percent … history shows us that.” One idea Perez does like is putting the same budgetary restrictions on city governments that the state government has to work within. “Perhaps it’s time we look at having a balanced budget amendment for municipalities, just like the state has to do.”

In the address, Bieter also outlined plans to build a 10-megawatt (roughly enough to power 6,000 average homes) solar power plant on city property west of the airport. To fund that $45 million plan, he called on the voters of Idaho to approve HJR 5, a measure on the ballot this November, which would allow airports to issue bonds for improvements. Those bonds would not be repaid by taxpayers, but by airport users, he said.

These new plans come on the heels of a recent announcement by City Hall that $915,000 paid to Boise by the Union Pacific Railroad will be spent on a “green” business incubator, creating a “foreign trade zone” around the airport, and for rail track maintenance. Bieter said spending that money would help spur the local economy.

The balance of that windfall will go to a $105,000 grant program the city will fund through the Arts and History Commission, which includes $25,000 to declare the Trey McIntyre Project, a ballet company, Boise’s first “Economic Development Cultural Ambassador.” In a city press release, Bieter cited a study done by the group “Americans for the Arts” which concluded that every tax dollar spent by a city on arts programs generates $7.00.

Moore, however, disputes the claim that every tax dollar spent on the arts is returned seven-fold. “There’s no multiplier effect. The Arts Commission is $25,000 richer, but the people of Boise are $25,000 poorer. That’s $25,000 less that they’ll have to spend on other things because the Arts Commission got that money. It’s a jobs loser, not a jobs winner, to give money to arts funding.”

In the last year, Boise taxpayers’ money also went to projects such as $20,000 to decorate traffic control boxes downtown, $10,000 for an LED streetlight pilot project in Hyde Park, $37,000 for a bike path in DeMeyer Park, and $25,000 to install 15 bike lockers in downtown parking garages.

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