Mayor’s Roundtable: Big Brother approach limits local government and favors the wealthy over most Idahoans

By Mayor Shelby Rognstad
Reader Contributor

I’ve spent the past week in Boise as your District 1 board member for the Association of Idaho Cities. There are a couple updates from the Idaho Legislature that I want to share with you that are relevant to Sandpoint. 

Sandpoint Mayor Shelby Rognstad.

House Bill 436 proposes a one-time rebate based on 12% of your 2021 Idaho income tax bill, or $75 per person (whichever is greater). It also eliminates the top tax bracket and reduces corporate income tax from 6.5% to 6%. Unfortunately, in supporting this bill the Legislature will no longer consider eliminating the grocery tax, which has been before the Legislature a couple times in recent years. 

This is particularly concerning for working-class families. Elimination of the grocery tax is a much fairer tax because it provides a real, lasting effect for lower-income earners. Saving a little money every time you go to the store makes a big difference when you don’t have much to begin with. Plus, the one-time rebate of $75 doesn’t even amount to what a family would save in grocery taxes over a year, year after year. Plus, most of that refund would stay in Idaho, benefiting Idahoans.

For someone making $1 million in annual taxable income, they would receive a $8,000 one-time rebate. In addition, under HB 436, they would receive a $5,000 annual tax cut every year. It’s worth mentioning that more than 80% of that refund ends up leaving the state to outside entities, making Idaho poorer. Clearly, the benefit is lopsided and favors the wealthy over working-class Idahoans. A tax cut for Idahoans is a good idea, but it should especially benefit those who need it most, which represents the vast majority of Idahoans. 

As AIC convened, we were joined by Gov. Brad Little. I asked the governor if he regretted signing HB 386 last session. The notoriously unpopular HB 386 caused an uproar from mayors and city councilors across the state like I had never seen. It capped budget growth for local jurisdictions at 8% regardless of their population growth. It steals urban renewal funds from local jurisdictions (cities, counties, fire districts, library districts, transportation districts, etc.) upon sunset of the urban renewal districts — when historically those funds would revert back to the local jurisdictions. It kicked many seniors and those on a fixed income off of rental assistance. The governor himself said this was a bad bill and would have negative unintended consequences… and then he signed it.

For a city like Sandpoint or Ponderay, we are seeing unprecedented growth and could likely exceed the 8% cap. Some small cities are already exceeding this growth rate. This means that our citizens will get a reduction in city services. The urban renewal portion of the bill would mean a 7.3% reduction in tax revenues for Sandpoint. For Dover, this would be a reduction of 134%. Not only is this devastating for cities and other local jurisdictions that are already having to do more with less, the impact isn’t applied equally. 

Mayors across the state, including myself, are talking with legislators to repeal the bill. It seems hopeful that the Legislature may repeal the urban renewal portion of the bill, but the rest will likely remain intact.

HB 442 is another bill that has been proposed to prevent local governments from regulating rental application fees for housing. 

Both of these bills are an example of a growing trend to take away control from local government. Idaho has always been defined by small government and trusting that local government best represents the interests and will of the people. I hope we can return to traditional Idaho values and elect legislators and state officials that respect that tradition and support local government control. The “big brother” approach we increasingly see coming out of the Capitol represents the growing extremism that is taking over our state.

There will be no Mayor’s Roundtable this week. I’m in quarantine recovering from COVID for the remainder of the week.