Printed on: February 18, 2013

Clearwater Paper, call Monsanto and Avista

Lewiston Tribune

Monsanto did it.

So did Avista.

Why can't Clearwater Paper?

Monsanto and Avista have distanced themselves from the $141 million personal property tax break the Idaho Association of Commerce and Industry wants state lawmakers to enact.

Monsanto spokesman Trent Clark said his company's tax break would come at the expense of its home county and constituents. Monsanto is located in Caribou County, where repeal would mean the loss of more than 40 percent of the local tax base.

Avista Lewis-Clark Regional Business Manager Mike Tatko said his company "does not support the elimination of property taxes at the detriment of communities in Idaho."

They're concerned the tax break would pull a huge pile of money from Idaho's cities, counties and schools.

If any Idaho company had a reason to follow their lead, it would be Clearwater Paper. It's among six large enterprises that can make or break their local communities. If the personal property tax is repealed, Thompson Creek Mining will take nearly 88 percent of the personal property taxes now going toward taxing districts in Custer County.

That's followed by Glanbia Foods, which gets 66 percent of Gooding County's personal property tax base.

Next is J.R. Simplot, on track to withdraw 62 percent of Power County's personal property tax revenues.

Then comes North American Foods, which gives 54 percent of the personal property taxes supporting Clark County's programs.

In Nez Perce County, 1,701 enterprises pay personal property taxes. The cost of giving total relief to 1,491 companies owning less than $100,000 in equipment would come to only $424,362. Total repeal would benefit only 210 more -- and it would take $4.93 million. And under that scenario, Clearwater Paper reaps more than $2.5 million, or 51 percent. The next largest tax cut, $401,115 or 8.1 percent of the county's personal property tax base, would go to Ammunition Accessories Inc. Tribune Publishing Co., comes in third with $120,544 in tax savings, or 2.4 percent.

By contrast, Micron is a big fish in a much bigger pond. It could expect to collect $2.9 million, but that represents 12 percent of Ada County's personal property tax base.

Coincidently, while Clearwater Paper, a company that reported making $19.1 million in the third quarter of 2012, picks up $2.5 million in tax savings, Lewiston's schools would lose $2.4 million.

Statewide, Idaho schools collect about $38.6 million in personal property taxes. Most, however, can automatically shift their levy onto the remaining homeowners and businesses. Through the peculiarity of Idaho laws, Lewiston schools can't. If the tax base shrinks 20 percent, its $12.3 million supplemental levy does as well.

Take your pick: You can save $2.4 million by cutting one of the following:

* More than 20 of Lewiston's 300 teachers.

* Every dollar spent maintaining the district's buildings.  

* The combined budgets of Lewiston's gifted and talented program, technology, interscholastic athletics and supplies - including textbooks - at each grade.

* More than twice what the district spends on counselors.

Or the district can ask patrons to ratify a 25 percent boost in the property taxes they pay to support the schools. How likely is that in a community that won't cough up more money to replace an aging high school?

Like its fellow Idaho Association of Commerce and Industry members, Clearwater Paper frames this issue in terms of what's fair and equitable. The personal property tax is cumbersome, difficult to administer and imposes a disproportionate burden on businesses - it says. Repeal "should be done in a thoughtful manner and we believe, as a company, there is a good solution that should work for everybody," says Clearwater Paper spokesman Matt Van Vleet.

But what's fair and equitable to the children of Lewiston? Or their parents? What do Monsanto and Avista understand that Clearwater Paper does not?