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Constitutional amendments on debt face Senate vote

Constitutional amendments on debt face Senate vote

Idaho Freedom Foundation staff
March 10, 2010
Idaho Freedom Foundation staff
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March 10, 2010

Idaho citizens could cast a vote this November that would allow public entities, including hospitals, airports, and city power systems, to offer bonds and go into debt. The Senate State Affairs Committee Wednesday approved three proposed amendments to the Idaho Constitution. The House approved the three amendments in February. A two-thirds majority vote in the Senate and majority vote in the statewide election would change the constitution.

The Idaho Constitution limits how much local government agencies can go into debt and requires a vote by citizens for a bond or debt that exceeds its income. The proposed exceptions for hospitals, airports, and power systems come after an Idaho Supreme Court case in 2006 ruled that Boise Airport needed to hold a public vote before offering bonds for a parking garage.

Proponents of changing the constitution say permitting public entities to go into debt would allow them to stay competitive in the marketplace and wouldn’t require taxpayers to foot the bill. The amendments say that local property taxes couldn’t be used to pay off the bonds.

“Airports throughout the state of Idaho are in support of (the amendment),” said Boise Airport director Richard McConnell. “No local tax dollars are used to support the airport.” He said the airport gets its revenue from federal grants as well as fees on airlines, car rentals, and airport tenants, including UPS and FedEx. He added that the ability to issue bonds could help the airport in its bid to get the F-35 fighter jet program. “The airport’s ability to access financial markets in a timely manner is a critical tool in the success of this campaign,” he said.

Kootenai Medical Center CEO Joe Morris also said that Idaho’s 20 public hospitals support the effort. “This change would restore the manner in which hospitals operated in until 2006,” he said. Morris said public hospitals need the same financial flexibility as private hospitals, and that if the amendment fails, more public hospitals would switch to being run by larger companies. “The public hospitals of the state are watching this.” He said he advocated for a similar amendment that was approved 14 years ago. “It’s like déjà vu all over again,” he said. Sen. Curt McKenzie, R-Nampa, said the section of the state constitution related to indebtedness, Article 8, has been amended eight or nine times since the constitution was written more than 100 years ago.

“The private hospitals are in full support of this measure," said Idaho Hospital Association president Steven Millard. "They view it as important for the health system of the state of Idaho.”

“I don’t know of an issue I can recall that has been vetted more, wordsmithed more, or had more lawyers involved,” said Senate Majority Leader Bart Davis, R-Idaho Falls. “It has been quite an interesting experience.”

Sen. Russ Fulcher, R-Meridian, opposed sending the amendments for airports and power companies to the Senate floor for a vote. He said he might support the measures on the floor, but was worried about the ability of airports and power companies to lease property included in the amendments. He said it could harken back to the construction of the Ada County Courthouse, which used an urban renewal agency and lease to finance a new building.

If the Senate approves the three constitutional amendments, Idaho voters would see three separate questions on their ballot. “What this requires is three separate votes by the people,” said Sen. Joe Stegner, R-Lewiston. “We would’ve preferred to have had as simple an option as possible, but there’s nothing simple about this issue.” The cost to print the proposed constitutional amendments in local newspapers and voter pamphlets could cost up to $120,000, though Stegner said the state could get a bulk discount by printing several amendments.

Read IdahoReporter.com's coverage of the amendment permitting airports to go into debt here. The text of the hospital amendment is available here, the airport amendment here, and the municipal electric system amendment here.

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