A 7-Year Plan To Phase Out Idaho’s Personal Property Tax? Not Quite

Joe Jaszewski / Idaho Statesman

Gov. Otter advocated eliminating Idaho's business personal property tax in his State of the State address early this month.

Gov. C.L. “Butch” Otter began and ended his talk to the Idaho Chamber Alliance this morning by cheering Chobani, the Greek yogurt manufacturer that opened a plant in Twin Falls last month. But the real subject of his talk was the 2013 legislative session, and his priorities for the months ahead.

One of those priorities is to establish a plan for eliminating Idaho’s business personal property tax. “We have a myriad of options,” the governor said, before appearing to float one of his own.

He’s set aside $20 million in his budget this year, he noted, to offset the losses in tax revenue that local government will face if the tax goes away. He then took a swipe at journalists who have pointed out that $20 million is far less than the $141 million the tax generated in 2012. “If you take a 7-year transition, seven times 20 is — 140,” Gov. Otter said.

He said much the same thing in Friday’s appearance on Idaho Reports. “I was shocked that maybe either I didn’t say it right or the reporters didn’t hear it right!” he exclaimed. “If you phase it out over 7 years, what do you come up with, at $20 million a year?”

However, the governor’s press secretary, Jon Hanian, says Otter isn’t necessarily throwing his weight behind phasing out the tax over 7 years, or keeping local government whole.

“He threw that out there as an example,” Hanian said. “He wants to have this discussion with the Legislature. It’s going to be an ongoing discussion as to how best to eliminate this tax and, as he puts it, do no harm to local units of government.”

See StateImpact‘s map of which companies will benefit most if the personal property tax is eliminated, and listen to our recent feature stories on the issue here and here.