January 23, 2013
- Kelly Aberasturi
- John Bechtel
- Dave Bieter
- Tom Dale
- John Evans
- Keith Green
- Nate Mitchell
- Greg Nelson
- Jim Reynolds
- Steve Rule
- Darrin Taylor
Staff and Guests
- Nora Carpenter, CEO – United Way TV
- Stephanie Carpenter, Director of Special Education – Caldwell Schools.
- Andrea Harris, Washington Trust Bank
- Theresa McLeod, City of Boise
- Bill Larsen – TVP
Nate welcomed everyone to Star for the January meeting of the Partnership.
Personal Property Taxes
Tom indicated he has just had a meeting with legislators on this topic that morning. They definitely want to do something. But the prevailing opinion among legislators he has talked to is they want to hold cities and counties harmless. He felt this was encouraging. When he has the opportunity he pushes AIC’s legislative initiative which is, advance to trigger to either $100,000 or $250,000, have an exemption floor and then replace it with some sort of funding. One of the obvious sources would be the internet sales tax.
Dave said he has gotten a couple reports that it has really floundered. He doesn’t want to say either way. Although apparently there was a rift among the IACI backers of Personal Property Tax reform in that some of them are saying they don’t want to cut funding to the towns we live in.
Nate stated that everyone has seen statistics of the impact of personal property taxes. On average it is only 10% of the property taxes state-wide. There are some counties that have in the mid 40% range of their budget is personal property tax.
Gene indicated he had talked to Lakey recently and he expressed the same impression Mayor Bieter got and they are really struggling to get the support they are going to need to pass it. Tom added that the logistics of this are tremendous when you see all the school districts out there that are dependent on that personal property tax.
Nate said that we are not really talking about repealing a tax; we are talking about shifting it. One of the thoughts that has come up in some of his conversations is let’s just do away the personal property tax and put it on real property tax, and then adjust the burden of who is paying for that through the home-owners exemption. When we increase the home owners exemption so home owners are exempted from the hit, essentially we are shifting it back on business in non-owner occupied real property. But you keep it all on a local revenue source where you are not depending on the State to do anything.
Tom added that the businesses in Canyon County have been slammed real hard the last three or four years as the county assessor has decreased the value of residential property far greater than he has on commercial property. This has created a tremendous shift in property tax burden to businesses. If we talk about shifting more taxes to businesses, it will kill them.
Tom continued to address the issue of what personal property is. You have things like railroad track counted as personal property. He doesn’t see the rail road track any different than a building. Same thing goes with a power-line or an underground gas pipeline. These are not personal property, this is real property.
Kelly said that the legislators are actually looking at that. They are talking that the operating personal property like power lines it will be separated out. In Owyhee County, their only business is agriculture. When it comes to local option tax and that, what are they going to tax? Additionally, why are we asking the entities that are supporting everything to begin with to pay more.
Keith said he agrees. He is not a business person and owns his own home. He feels that the property tax is unfair. For example if you are a renter, you are not paying anything into the system. He would be in favor of paying one cent in sales tax and have everyone share in the burden than have it rest on the property owner.
Nate said he doesn’t necessarily disagree with the concept of taxing fairly. However we have the reality of the tax system in the State right now. They are not talking about wholesale changes. In reality, nobody is taxing these people but us. We are the ones whose budgets are affected by this personal property tax. If we don’t want to shift that to another form of local tax, then we are going to have to look at cutting our budgets by that amount. In Star, the personal property tax is only around 3% of his budget. It is less than $35,000 to the City and if it went away tomorrow, their services are not going to be affected critically by elimination of the personal property tax.
Tom said that it represents 12% of their property tax budget and represents about $ 4 million. 95% of their property tax budget goes to pay for fire and police. The only way to cut this out of their budget is to cut fire and police protection. He is not willing to do that and doesn’t think it is even an option.
Dave said that something like 90% of the businesses that pay personal property tax would be exempt under the existing law if the revenue reached a certain milestone. Time for this exemption is unfortunately depending on the economy.
Transportation and Economic Development Zone
Nate said that last year this legislation didn’t make it out of committee. John said that from AIC’s perspective the guarantee for repayment comes with the capture of the increment sales tax generated by the business. The guarantee for the bond holder is the entire sales tax in the State. The modifications to change that would be that the bond repayment would be restricted to the increment. The criticisms are that it would move sales tax generation from one location to another. The proponents say it will generate new business because of the access along the freeway access corridor. The deal killer would be encumbering the entire sales tax revenue of the State.
Other Tax Related Issues
Tom said there is a great demand for call centers. In order to run a call center, you have to buy and stay up to date on computers and software. Every time they buy a computer or update their software, they pay sales tax. However, a great deterrent in attracting call centers to the State of Idaho is that sales tax. Because of their need to keep abreast of technology, they end up paying a lot of sales tax on operational related purposes. There are sales tax exemptions on operational equipment in other types of businesses.
Dave said Western Aircraft had an exemption added this last year that they have five years to prove that the exemption is producing to justify the sales tax exemption. If they can’t produce, it will go away. He thinks this is not a bad policy because there are a lot of exemptions that went in in the past and no one knows about them anymore. He mentioned a Business Insider section to the Idaho Statesman that showed how Idaho ranked in several business categories. The point was there are certain industries that are sensitive to the personal property tax and let’s talk about that. If we are missing out on a sector of economic development because the personal property tax, then let’s try to fix it. Otherwise it is the whole piece that businesses like to see and in Idaho, we fare pretty well.
Tom said that as city and county folks we can frame these arguments. One of the things people like to toss up is, how come your property taxes higher than so-and-so. We need to be talking about cost of living not just tax. When you start comparing cost of living, the fact that schools are paid out of property tax, and the other intangibles things start to even out. When you start comparing us to other parts of the country and we are pretty darn good.
Nate said that there is any doubt we can argue competitively with the rest of the country. The struggle a lot of Idahoans have is they can’t afford the cost of the goods were selling. People have a hard time making it. We are 31st in taxes and 50th in income. We ought to reverse those some way.
Tom said that on the environmental side of things, DEQ has announced that they are probably going to list Indian Creek as impaired for phosphorous. It doesn’t affect most people but it will affect Nampa, Caldwell and may affect Kuna some. This means trade and offset like Boise is looking at. It wouldn’t be possible because Indian Creek being designated as impaired you couldn’t trade enough anywhere else to make it work. He is more interested in infiltration than trade and offset because it gets you out from under the thumb of the EPA. In the City of Nampa’s analysis of Indian Creek, it confirms that it has too much phosphorous. The WAG (Watershed Advisory Group) wants to fight it and challenge DEQ on some procedural things. The City of Nampa’s position is to say it is impaired and work with EPA and DEQ on getting the TMDL on it.
Kelly said that you want to be careful with this because of what happened to them in Owyhee County. DEQ and they had come up with a plan on two of their creeks for Mercury. EPA did not agree with DEQ on this and were going to try to enforce Mercury levels to the standard of Oregon. Meeting the Oregon standard is not possible because the natural occurring mercury is higher than the standard. He asked EPA what they expected them to do and they said Owyhee County would have to meet the standard.
John E. said Ken Harward and him had a meeting with Dan Chadwick on the topic of funding magistrate courts and the user fee portion of the fine for infractions. He asked members to keep their radar up. The plan between AIC and IAC is to look at a bill at the next legislative session to deal with the user portion of fines to help offset costs of magistrate courts.
Bank On Literacy Program
Nate introduced Nora Carpenter the President of United Way of Treasure Valley and Andrea Harris, one of their citizen leaders for a key initiative United Way has undertaken called the Bank On Literacy Program.
The United Way of Treasure Valley has a long history of collecting, engaging and distributing funds to those who need funds. Particularly over the last couple of years, the United Way has shifted to engaging and mobilizing across a broader base, bringing more organizations together and rallying them around specific pivot points. Those pivot points are the areas of education, financial independence, and health. In addition to insuring that good agencies are producing good outcomes for our communities, United Way is now also pushing down hard on these areas.
You are going to hear about two of our earliest initiatives that are taking place and we are inviting you and your communities to become more involved.
To close the loop on United Way’s three pillars. Why education, financial independence and health? She was sure the members of the partnership understand that an educated person is able to get and keep a job that will sustain themselves and their family. If they have financial independence, they are able to keep and those manage those funds and lift their family up over time and not be a burden to themselves and society. Children that are healthy can be educated and can grow in their education and complete that loop.
In the area of financial stability, the Treasure Valley came together and said very clearly that living paycheck to paycheck is not a financial strategy. And yet we have a significant percentage of the population in the communities that do just that. And our unbanked population; those that are living or are not living paycheck to paycheck, don’t have access or have chosen to not have access to a bank account. It means they are using some of the high interest lenders for financial transactions. This puts them into a spiral for decreasing access to financial stability. Bank On is an initiative that is taking place all across the country. It strives to insure that any family or individual has access to financial institutions like a bank or credit union.
Andrea stated that a lot of people without access to a financial institution were victims of account fraud or abuse. Instead of having these people turned away from access to a financial institute, we want to teach them how to maintain a checking account, how to save, and how important credit is and start them on the road to recovery instead of sending them the other direction.
For Bank On Treasure Valley, we are really looking at the quality of individuals that are coming forth instead of quantity. If you look at Bank On Fresno, they may open 3,000 Bank On accounts. But in none of these cases there is a requirement to have financial education. Whereas the Bank On Treasure Valley want to make sure that when they are coming into the program, the participants have that financial education.
We want to remove the barriers that are keeping families and individuals from the financial mainstream. The barriers are those check cashing agencies and there are a lot of them out there.
We have two different categories of people. We have the unbanked and the under banked. The unbanked individuals have no access to banking relationship whatsoever. They have done something in their past that prevents them from having an account at a bank or credit union. Under banked individuals are those that may only have one service. They may only have a checking account or they don’t qualify for a checking account and all they have is a savings account. They still need to cash their paychecks and they have to go somewhere and that comes with a price. Right now those individuals spend about 10% of their income at these check cashing locations. We want to reduce that. Annually, those check cashing places make about $1.6 billion in revenue.
Also we want to track what we do. We don’t just want to roll out a program; we want to monitor it because the education is important for us.
The number of unbanked households in the Boise Metro Area (Ada, Boise, Canyon, Gem and Owyhee Counties) is 12,274. This represents 5.7 of our population. In the State of Idaho there are over 37,000 people and we know this number grows every day. The number of under banked household in the Boise Metro Area is over 37,039 or roughly 17.2% of our population.
Obviously we are not going to be able to touch all of these households, but if we can touch a handful of them we can start reducing these numbers.
Nora stated there are number of banks and financial institutions involved in this initiative. The banks are accepting all of the risks by agreeing to deal with this population. At the same time these banks recognize that if these folks don’t have access, these folks will never be able to lift themselves up financially.
Nora continued. The Bank On program is getting ready to launch. The program steering committee, which consists of a bunch of banking institutions that are interested in general financial stability across the marketplace, have created several subcommittees to develop the components of the Bank On program. The financial education piece is critical. This subcommittee has been working to choose the curriculum each of the participants will go through. Choosing the curriculum and making it widely available is critical. The curriculum that has been chosen is one that is produced through the FDIC. Now we are busy trying to make sure the individuals that want to participate in this program have access to the training whether it be in a classroom or online. Once the class is completed, participants get a certificate that they can take into a bank or credit union and say I am now ready. Banks have agreed to adjust some of their policies for approving accounts for people that are carrying this certificate.
This is a little more of a gauntlet for participants to get through than other parts of the country. However, we think in the end, it is the right thing to do to help people get financially secure.
Andrea indicated that the education curriculum is also produced in 8-9 languages. This is an important piece for us. It helps us get our Hispanic population to be able to participate. Also it helps us when reaching out to our refugee populations from other countries.
Nora pointed out some of the partners in the process. There are a lot of banking organizations and nonprofit organizations that are partners. These nonprofits are a critical component in that some of them are already teaching financial literacy to a specific population. For example, nonprofits that serve people that are about to leave the corrections system, families that are going through crisis or refugee populations. If we can align that curriculum to ones that are already being instituted so people can obtain that certificate, this is a win-win for the individual, the agency and for Bank On.
So what can happen at the community level and how can members of the Partnership help? 1, help us generate awareness. You have folks in various departments that are dealing with populations of folks that are highly unbanked or under banked. You can make your staff aware of this program so when they are talking with citizens they can help direct people toward this program. They expect to launch this program during the first quarter of 2013. Nora indicated they would be notifying people when the program starts up.
Also, Nora said, if you know members of the community that would like to participate at the steering committee level, they welcome that. The more people involved the faster implemented and more successful this program will become.
Jim asked if this program would lend itself for use in the secondary schools. Nora indicated that it could be done on a class by class basis. But this would depend on the teacher making that part of the curriculum.
Darrin asked, what is the cause of unbanked individuals? Andrea stated that speaking from the banking side of it, a lot of the unbanked are people that are unable to present proper forms of identification. With this program, some of these ID requirements could be waved through the education component. This reduces the banks risk. Also, a lot of the unbanked are people that were 100% bankable before, but they have done some negative things. Serious overdraft problems or fraud are some of the negative things that make people unbankable.
Andrea stated that overdrafts in and of themselves do not make a person unbankable. It is how they have managed their account. If a person overdrafts an account for $400 for example, instead of making right with the bank, they have walked away. The bank then is stuck with the $400 and turns the individual into collections. What people don’t realize is when they go to open a new account; this follows them and keeps them from getting a new bank account.
Steve asked what the long term mission for the Bank On program. Nora said there are two sides to this. First there is the financial and then there is sustainability, making the education available and having the ability to get the education to the folks that need it is priority one. In addition all the organizations they listed as partners have come to the table with a financial commitment as well. Hopefully they will maintain that after the year-long project gets going. Also, United Way has designated some funds until the program can carry itself. That is United Way’s role to incubate programs and get them up and sustained on their own.
Nate asked if they had compiled any historical data for this region. Are we worse off today as a percentage of population than we were 10 years ago? Nora indicated she did not know and she will attempt to find out.
Nate asked how they are identifying and contacting the unbankables. Nora indicated they are doing a mix of approaches. Social media is helping them distribute the word about the program broadly. By utilizing community partners, that are already working with a client base, they are able to market the program to people in need.
Andrea added that they have brochures, ads and are working on other traditional marketing media that hopefully will help to spread the word to those who need it.
John B. stated that Wilder is a community that is 76% Hispanic. They have one bank, Zion. He noticed this bank is not part of the list of partners. Nora stated that they have been working with Zion and hope to have them on board shortly.
Keith indicated that if the program went to the school districts and could identify those on free lunch programs; this could be a major source of those who might be in need of this kind of help.
After 3 Program
Nora stated that as part of United Way’s community assessment they looked at the education and work force from cradle to career here in the Treasure Valley and a couple of things popped out. By 2020, more than 60% of Idaho jobs will require a career certificate or college education of some variety. Right now 90% of Idaho students graduate from high school. However, we are losing people between high school and college. More than half of high school graduates do not go on to some sort of post-secondary education.
The Treasure Valley Education Partnership (TVEP) began from the Superintendents from Ada and Canyon County. They reached out to United Way a little over a year ago and asked for help in moving our kids on further. The TVEP has a goal of moving participation in career education to 80%. The focus areas for TVEP include: 1) Children are prepared for school. This program helps with insuring that children are ready to learn and knows the process before they get to school. 2) Children are supported inside and outside of school. 3) Ensure children succeed academically. 4) Ensure a successful transition between high school and post-secondary opportunities. 5) Enter a career of their choice and 6) is a meaningful career progression. Literally it is Cradle to Career continuum.
Nora introduced Stephanie Carpenter from the Caldwell School District who will talk about how children are supported in and out of school. Stephanie is the Director of Special Education. She realized quickly that it takes a whole community to raise up kids into being successful citizens.
They have created a broad network of nonprofits and community groups to assist kids before and after school. A supported child is one that benefits from positive social relationships, positive attitude and emotion, and the ability to control ones behavior, and feelings of confidence. The question their committee asked is how they give children access to these things. One is money but it is also knowledge. As a parent, she questions whether she knows of all the quality programs that are available for her own children.
Stephanie introduced Theresa McLeod with the City of Boise. Theresa stated that her focus is community initiatives. Years ago they were looking at having an understanding of what programs were available for school age children and insuring that there is a good mix of safe and affordable programs.
They set out on an assessment process using the City’ GIS program to detail and locate all after school programs they were aware of. They looked at those well-known programs that have a good reputation. They contacted all the providers and mapped the locations and overlaid other information such as juvenile crime statistics to the map. They could then see visually, the geographic regions of the City that were underserved. This information fed into strategic planning for the Mayor and City Council.
They created After3 Boise. It is an on-line program locator. Citizens can access the web, type in a location and receive information on programs available in their area. People can search by a variety of criteria including whether programs are free or not. The website for the After 3 program is: http://www.after3boise.com/.
It is a great tool for parents. But it is also an asset for city leaders in helping to identify capital improvements. And it is a public awareness opportunity for us to share with potential citizens and employers that shows we have safe affordable after school opportunities for children in our community.
They were able to partner with the Chamber of Commerce and major employers to market the program.
After 3 Boise envisions this program being valley wide. This information and program all reside on the web. The City of Boise’s IT team has offered to provide technical training and support for all treasure valley communities to be on this platform. It would require that someone gather the community information for input into the program.
Dave B. stated the best endorsement he can give is he has used this program. He and his wife have a seven year old and they were curious what was within a one mile radius of their house. Low and behold there is a Girl Scout troupe one block away that they were unaware of.
Dave B. said to get to where they are with the program was a pretty heavy lift. The League of Cities gave the City of Boise to charter it. What they are excited about is collectively we can drive kids to this program. There are some economies of scale of advertising so we maximize knowledge of the program. He added that this program was also valuable for making policy decisions because they can see where the gaps are.
SAUSA Project Update
Chris Atwood thanked the Partnership for both creating the SAUSA Project and continuing to fund it. He has been in the program for about six months. Since he has come on board, they have filed a series of cases on the Aryan Nights gang. There were 23 defendants indicted on Federal gun and drug charges. 12 have pled guilty so far.
The BMC case they have been working on that involved RICO charges. There were two final defendants out of all of those guys that are set to go to trial next month. These two pled guilty last week so their trials have been vacated and sentencing will be in March.
Kelly asked when we get someone to plead, how much does that save? Chris said that he couldn’t give a figure but knows it is significant. The more time and resources we spend on a case and can avoid a trial, the more time it frees his time up to prosecute other cases.
Bill stated that because David Ferdinand was a signer on our account and is no longer a TVP member, he needs a motion to get a new signature card from our bank. Darrin moved and Nate seconded that Bill obtain a signature card from the bank. Motion passed unanimously.
Bill indicated that a couple weeks prior, he sent out a request to the members for those that are intending to participate in the sexual abuse prevention training program, Darkness to Light. He has gotten a couple responses of those that are participating but it is not a large representation of the Partnership.
Bill indicated that on the 10th of December they had the City/County 101 Training. There were 13 legislators that participated. He felt it went well even though we did not have the turnout we were expecting. Bill stated that the suggestion he got from the legislators he had talked to was to hold a Treasure Valley legislative get together either in the spring or the fall and not have the event so close to the opening day of the legislature. He felt it might be a good time to hold a meeting with legislators after school starts and after our retreat in September.
On the 14th of December the Partnership had its presentation to the Idaho Criminal Justice Commission. Tom, Chris Atwood, U.S. Attorney Wendy Olson and he spoke about the SAUSA Project. Bill mentioned that during the presentation, Director Reinke turned to them and indicated that we are not going to get an increase in State funding that we are asking for, but we will get something. John B. stated that he had been talking with Rep. Bolz and he had indicated we probably won’t see an increase of State funding to $75,000 but we will see something.
Bill stated that Tom, Garret, Ross Borden with the City and he were going to meet with the co-chairs of JFAC on the 6th of February. He hoped members didn’t mind, but Ross has kind of given each TVP member an assignment with regard to advocating the legislature for increased State funding for the SAUSA Project.
It was moved and seconded to accept the minutes and financial statement. Motion carried unanimously.