Home Address: Office Address: 1010 South 2nd East State Capitol Rexburg, Idaho 83440 . P-Q BOX 33720 (208) 356-7495 Boise, Idaho 83720-008i E-mail: bhill@senate.idaho.gov (203) 332-1300 Idaho State Senate BRENT HILL PRESIDENT PRO TEMPORE August 28, 2012 Dear Mayor and City Council: As you know, the Idaho Legislature is considering eliminating the tax on personal property owned by businesses throughout the state. One of the proposals will likely phase the personal property tax out over four or five years. But, unlike the bill that was passed in 2008, the state would n_ot reimburse the cities or counties for the revenues lost as a result of eliminating the personal property tax. In addition the legislation might prohibit you from replacing any of the revenue lost on personal property tax by shifting the tax burden to property through increasing levy rates. In order for legislators to properly evaluate this and other options for abolishing the personal property tax, we need to better understand the effects on our local cities, counties, and other taxing districts. Your response to a few questions would be very helpful to us: I. What percent of your total budget is from property taxes? 2. What percent of your city's property tax receipts comes from personal property? 3. How much (as a percentage) has your total city budget increased or decreased over the past 5 years? 4. What major areas of your budget have increased and what do you think caused the increases? 5. If this legislation passes, but you are given the option of increasing the levy on real property (including residential) to offset the loss of personal property tax, what is the likelihood that your city would do so? If you would like to explain what consequences the phase out of personal property tax revenues would have on your city, that would certainly be helpful to the legislature. I know you and your staff are very busy and I apologize for the time it will take to respond to these questions, but I hope you agree that this is an important issue to your city and we appreciate your help. I also invite you to share your responses with your local legislators so they can make an informed decision. Sincerely yours, Senator Brent Hill President Pro Tempore Idaho State Senate