Could an Idaho initiative raise the sales tax to 6% and dedicate the extra revenue to public schools?

Plain-English summary

This is the Idaho Attorney General's advisory review under Idaho Code § 34-1809 of an initiative filed on December 5, 2005. The certificate identifies the petitioner as the Idaho Education Association. The proposal would have set the Idaho sales and use tax rate at 6% beginning July 1, 2007, placed additional revenue in a school investment fund, and required annual reports from local school districts.

The AG raised several drafting and constitutional concerns:

Inconsistent terminology. The initiative used three different formulations of permitted uses across proposed Idaho Code §§ 33-911, 33-912(a), and 33-912(b): "funding public education at the K-12 level," "any of nine designated purposes," and "90% must be used for classroom instruction and support." The AG recommended a single consolidated provision and a definition of "classroom instruction and support."

Appropriation left to future legislatures. Idaho Constitution art. 7, § 13 requires an appropriation made by law before money may be drawn from the treasury. The Attorney General did not read "shall be utilized" for public education as an appropriation. The certificate recommended changing the language if an appropriation was intended and cited Idaho Code § 33-1513 as an example of continuously appropriated funds.

Charter school ambiguity. The proposal used inconsistent terms ("local school districts," "local schools," "public schools," "K-12 public schools") and did not address how charter schools (which are public schools but are operated by nonprofit entities and chartered by either districts or the Public Charter School Commission) would participate in the funding mechanism or its reporting obligations.

Federal funds reference. The initiative required the annual K-12 appropriation to include "federal funds." The AG flagged that as problematic because federal-fund use is governed by federal, not state, law.

Repetitive rate language. The "[t]he sales and use taxes ... shall be returned to and maintained at the six percent (6%) rate" language was repeated in two sections, with only one carrying the "effective July 1, 2007" qualifier. The AG recommended removing the redundancy.

Directions to future legislatures have no legal effect. The proposal directed legislative action on the tax rate, a possible alternative revenue stream, school appropriations, and a 2020 ballot question. The certificate said an initiative produces a statute that a future legislature may amend or repeal, so these attempted limits and duties would not effectively constrain later sessions.

Distribution mechanics oversights. The required revenue placement in the "Idaho Local Public Schools Investment Fund" did not account for Idaho Code §§ 63-3203 (tax anticipation note distributions) or 63-3709 (multistate tax-collection reductions).

Other funding ambiguities. The review said combining earmarked revenue with other school appropriations might frustrate the required reports. It found no standard for measuring the proposed promise to keep other public services harmless or to augment rather than replace existing school support. It also requested a more precise inflation calculation.

What this means for you

If you are drafting an education-funding initiative: The certificate calls for one clear statement of permitted spending, an express appropriation if the measure is meant to spend fund money without a later appropriation, and a rule for tracking earmarked money through school budgets. It also asks for a standard to measure promises about existing services and school support.

If you work with charter schools or school districts: The review says the proposal did not clearly tell charter schools, chartering bodies, and operating nonprofits how to participate in the funding and reporting system. The certificate gives no allocation formula for them.

If you are assessing legislative obligations: The review concludes that this initiative's statutory directions could not prevent a later legislature from amending or repealing them. It is an advisory review of a proposal, not a determination of whether the measure was adopted.

Currency note

This opinion was issued in 2006. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The certificate analyzes a proposal and cites law as understood in 2006. Check present law before applying its analysis to another measure.

Common questions

Q: Does this certificate say whether the initiative reached the ballot? A: No. It reviews the proposed measure and certifies that the Attorney General's advisory comments were sent to the petitioner. It does not report the measure's later ballot status or any later change to the tax rate.

Q: Why does the appropriations clause matter for ballot initiatives? A: Idaho Constitution art. 7, § 13 bars drawing money from the treasury without an appropriation made by law. The certificate said placing the extra revenue in a fund still left spending subject to future appropriation, because "shall be utilized" did not itself appropriate it. It cited Idaho Code § 33-1513 as an example of continuous-appropriation language.

Q: Why can't an initiative bind future legislatures?
A: The certificate says an initiative produces statutory law on the same footing as legislation passed by the legislature. A later legislature can amend or repeal a statute, and a statute cannot take away the legislature's constitutional power to make law.

Q: What did the AG say about charter schools?
A: He noted charter schools are public schools (Idaho Code § 33-5203(1)), some are authorized by school districts (§ 33-5203(3)) and some by the Public Charter School Commission (§§ 33-5203(5), 33-5207(6)), and they are all operated by nonprofit entities (§ 33-5204(1)). The initiative did not clarify whether charter schools would receive funding from the new investment fund and how the chartering entities and operating nonprofits would handle reporting obligations. The AG recommended explicit language addressing this.

Q: What is a "Certificate of Review"?
A: A statutory pre-circulation review of a proposed ballot initiative by the Idaho Attorney General under Idaho Code § 34-1809. The recommendations are advisory only; the petitioner is free to accept or reject them in whole or in part.

Background and statutory framework

The proposal would have set the sales and use tax rate at 6% from July 1, 2007. It called for added revenue to go into a school investment fund and for local school districts to use at least 90% of the revenue for "classroom instruction and support." The certificate noted that the proposal used both "Idaho Public Schools Investment Fund" and "Idaho Local Public Schools Investment Fund" and that its spending and reporting directions needed clarification.

The certificate's recommendations were advisory. It addressed the proposal's wording and legal concerns, not whether the policy should be adopted.

Citations and references

Statutes and constitutional provisions:

• Idaho Code § 34-1809 (AG initiative review)
• Idaho Code §§ 33-911 to 33-917 (the proposed new sections)
• Idaho Code § 33-1513 (continuous appropriation for pupil transportation, cited as model)
• Idaho Code §§ 33-5203 to 33-5209 (public charter schools)
• Idaho Code §§ 63-3024 (CPI calculation example), 63-3203, 63-3709
• Idaho Const. art. 3, § 1 (legislative power, initiative)
• Idaho Const. art. 7, § 13 (appropriations clause)

Cases:

• Peterson v. Franklin County, 130 Idaho 176 (1997)
• Luker v. Curtis, 64 Idaho 703 (1943)
• Gibbons v. Cenarrusa, 140 Idaho 316 (2002)

Source

• Landing page: https://www.ag.idaho.gov/office-resources/opinions/
• Original PDF: https://ag.idaho.gov/content/uploads/2018/04/C010506.pdf

Original opinion text

STATE OF IDAHO
OFFICE OF THE ATTORNEY GENERAL
LAWRENCE G WASDEN

January 5,2006

The Honorable Ben Ysursa
ldaho Secretary of State
STATEHOUSE

Re: Certificate of Review
Proposed Initiative to Increase Sales and Use Taxes and Applv Revenues to Public Education

Dear Secretary of State Ysursa:

We reviewed the initiative petition filed wrth your office on December 5, 2005 As required by ldaho Code § 34-1809, we offer the following advisory comments Due to the limited time within which we must respond and the complexity of the legal issues raised in this petition, our review can address only general issues or areas of concern We cannot provide in-depth analysis of each issue that may present problems Further, the review statute provides that the Attorney General's recommendations are "advisory only " The petitioners are free to "accept or reject them in whole or in part " Our review addresses only matters that may affect the initiative's legality We offer no opinion about the policy issues raised by this proposed initiative

BALLOT TITLE

Following the filing of the proposed initiative, we will prepare short and long ballot titles,. The titles should impartially and succinctly state the purpose of the measure without being argumentative and without creating prejudice for or against the measure,. If petitioners wish to propose language with these standards in mind, we recommend that they do so.. We will consider their proposed language in our preparation of the titles.

MATTERS OF SUBSTANTIVE IMPORT

Summary of the proposal:

P.O.BOX83720, Boise, Idaho 83720-0010
Telephone: (208) 334-2400, FAX: (208) 334-2530 Located at 700 W Jefferson Street, Suite 210

Secretary of State Ysursa
January 5,2006
Page 2 of 7

We understand the proposed initiative intends the following results:

1 Two separate sections of the initiative set the rate of tax of sales and use tax imposed by the ldaho Sales Tax Act at six percent (6%) beginning on July 1, 2007
'
2 The additional revenue raised is to be placed into an "ldaho Public Schools lnvestment Fund" that would be created by the initiative,.*

3 It directs that the revenue placed in the ldaho Public Schools lnvestment Fund be used for specified purposes related to public schools3

4 Local school districts are required to make annual accountability reports about the use of the revenue and make the reports "easily available to the general public,."4

5 It expresses several responsibilities and limitations on the ldaho legislature

The operative language raising the sales tax rate requires that the increase rate be "maintained" at the six percent rate This seems to be an attempt to limit the ability of the legislature to reduce (or increase) the rate after the time the initiative becomes effective

It charges the legislature to develop "an alternative state-based revenue stream" in the event the legislature increases the sales and use tax rate before the effective date of the initiative7

1
Proposed ldaho Code §§ 33-910 and 33-916 2
Proposed ldaho Code 5 33-911
3
Proposed ldaho Code $5 33-91 1 & 33-912. The former section provides the funds "shall be utilized for funding public education at the K-12 level" The latter limits the use of the funds to nine specified purposes and further provides that local school districts must use at least 90 percent of the revenue for "classroom instruction and support." 4 Proposed ldaho Code 5 33-913
5
See footnote 1
6
Ordinarily a tax rate, once set by law, remains in place until such time as it is changed by an amendment or repeal of the statute setting the rate Thus, the "and maintained" language is either an attempt to direct future legislative action or it is unnecessary surplus The rules of statutory construction advise against construing the statute to include surplus language. Ebv v. Newcombe, 116 ldaho 838 (1989); Maanuson v. ldaho State Tax Comrn~ssion,97 ldaho 917 (1976)

'Proposed ldaho Code 5 33-910,

Secretary of State Ysursa
January 5,2006
Page 3 of 7

It requires that funds raised by the initiative "shall be utilized for funding public education at the K-12 level,."8

It directs the legislature to enact prescribed minimum appropriations for "K-12 public school support" and limits the ability of the legislature in future years to reduce the "general account appropriation for K-12 public school support"9

It specifically directs the actions of the "2007 ldaho Legislature, in establishing the general account appropriation for K-12 public school support for fiscal year 2 0 0 8 " ' ~

It directs that the ldaho legislature place on the general election ballot in 2020 a ballot question relating to the reauthorization of the act"

Comments:

The Attorney General's Office is required to "review the proposal for matters of substantive import and shall recommend to the petitioner such revision or alteration of the measure as may be deemed necessary and appropriate
"''
We have reviewed the initiative and offer the following recommendations

General Comments:

The language needs more specificity in its financial controls and accountability We understand the language to require the annual "general account appropriation" for public schools to include funds from several source^,'^ including the proposed ldaho Local Public Schools lnvestment Fund, which shall then be "distributed to local public schools as provided in chapter 10, title 11, ldaho code."I4 There are several conflicts and ambiguities in this process that need clarification First, the funds from the ldaho Local Public Schools lnvestment Fund will be subject to limitations that may not apply to

8
Proposed ldaho Code § 39-911
9
Proposed ldaho Code 5 33-914

lo Proposed ldaho Code 5 33-916(b)
l1 Proposed ldaho Code 5 33-917
" ldaW Code 5 34-1809

'3 Proposed ldaho Code § 33-914
14
Proposed ldaho Code 3 33-915

Secretary of State Ysursa
January 5,2006
Page 4 of 7

other funds in the annual public schools appropriations Simply lumping the funding sources together may result in losing the ability to account for the earmarked funds, thereby making the required annual accountability reportsI5 problematic at best,.

The initiative could be improved by using more consistent language to describe the schools or districts to which the additional revenue to be raised is to be distributed,. For example, proposed ldaho Code § 33-912 provides that "local school districts" shall spend the revenue to help improve "local schools" which includes providing support of "all public schools,." Proposed ldaho Code § 33-914 provides the additional revenues are to be included within the appropriation for "K-12 public schools." These inconsistent terms lead to potential confusion over "local schools" vs.. "public schoo~s"'~ as well as potential confusion over the participation of charter schools in the proposed additional funding. All charter schools are public schoo~s'~.Some charter schools have been authorized by school districts,I8 and some charter schools have been authorized or otherwise fall under the jurisdiction of the Public Charter School omm mission'^ All public charter schools are operated by nonprofit entities and function independently of the governing board of the entity that chartered them,." However, the chartering entities remain responsible to see that their authorized public charter schools operate within the bounds of the approved charte12' and applicable law," Consequently, the proposed legislation needs to clarify the participation of charter schools in the proposed funding mechanism and the level of participation of the chartering entities and of the directors of the nonprofit entities that operate the charter schools with respect to reporting obligations and the like.

Specific Comments:

Item 1. It is unclear why the operative language "[tlhe sales and use taxes imposed upon each sale or purchase subject to taxation under the ldaho Sales Tax Act, Chapter 36, Title 63, ldaho Code shall be returned to and maintained at the six percent (6%) rate

15
Required by proposed ldaho Code § 33-913 16
The terms "local school districts" and "local schools" imply a distinction between districts and schools that are "local" and those that are not Unless a distinction is intended (in which case the distinguished class requires a definition), the word "local" is surplus and should be stricken 17 ldaho Code § 33-5203(1) provides that "[plublic charter schools shall be part of the state's program of public education "

laldaho Code § 33-5203(3)

ldaho Code §§ 33-5203(5) and 33-5207(6)

20 ldaho Code 5 33-5204(1)
ldaho Code § 33-5209

22 ldaho Code § 33-52010(2)

Secretary of State Ysursa
January 5,2006
Page 5 of 7

in effect on June 30, 2007" is reiterated in proposed ldaho Code 33-910 and 33-,916,, Only the latter. follows the language with the phrase "effective July 1, 2007" Rules of statutory construction require that all language in a statute be given some effectz3 Thus, the unnecessary repetition raises possible interpretations that are not consistent with the petitioner's apparent intent,. We recommend modifying the language to remove the repetition,,

ltem 2. As written, the requirement that the revenues received as a result of the rate change be placed in the specified fund re uires that any expenditure from the fund be by future appropriation by the legislatures We do not understand the language that the funds "shall be utilized" for public education to constitute an appropriation If it is the petitioner's intent to effect an appropriation, this language should be modified accordingly 25

The initiative requires that the "portion of the increased revenues, after refunds, derived from" the increased rate "shall be placed in the 'Idaho Local Public Schools Investment
~und,."'" This language takes no account of ldaho Code §§ 63-3203 or 63-3709,, These reduce distributions for tax anticipation notes and certain multi-state tax collections,,

ltem 3. The initiative limits the purposes for which the funds raised by the increase in sales and use tax rates may be used However, these limitations are expressed differently in different parts of the initiative,. Proposed ldaho Code § 33-911 says the new revenue must be used for "funding public education at the K-12 level" Proposed ldaho Code 33-912(a) says it must be used on "any" of nine designated purposes.. Proposed ldaho Code § 33-912(b) says 90% must be used for "classroom instruction and support.." These limitations may not be consistent We recommend a single provision setting out the petitioner's intent in regard to the use of the funds,. That provision would be improved by a definition of "classroom instruction and support"

'The proposed initiative charges the legislaturez7 with developing an "alternative state- based revenue stream" in the event the legislature increases the sales and use tax rates before the effective date of the initiative. The alternative must hold 'Tunding for all

23
Potlatch Corm v. US., 134 ldaho 912 (2000); Peterson v. Franklin County, 130 ldaho 176 (1997), 24
Art 7, § 13, ldaho Constitution, "No money shall be drawn from the treasury, but in pursuance of appropriation made by law" 25 See ldaho Code § 33-1513 for an example of funds "continuously appropriated," in this instance for pupil transportation

2 ~ r ~ pldaho e d5 33-911
~ ~Code

" See ltem 5 below for a discussion of the effectiveness of such a charge

Secretary of State Ysursa
January 5,2006
Page 6 of 7

other existing public services harmless NO standard by which the legislature or a court could determine if this requirement has been met is expressed There is a similar problem with the requirement that the annual general account appropriation "augment, n29 rather than replace K-12 public school support

'The proposed initiative requires that the "annual general account appropriation for K-12 public school support" include "an annual inflationary factor, based on a percentage change in the consumer price index for. all urban consumer^^."^^ Greater specificity about how to make this calculation would remove doubt about which potential calculation is ~orrect..~'

The same section requires that the "annual general account appropriation for K-12 public school support" include 'Yederal funds.." 32 The reference to federal funds is problematic because their allocation, distribution, and use is governed by federal and not state law.

ltem 4. Our only recommendations regarding the requirements in proposed ldaho Code 5 33-913 for local accountability reports on use of revenues relate to the ambiguity of the term "local school district" discussed above under general comments.

ltem 5. The multiple provisions expressing limitations and dut~esfor the legislature are problematic Efforts to direct or limit actions by future sessions of the legislature are of no legal effect The initiative process in ldaho is limited to proposing and adopting changes in statutory law 33 Initiative legislation is on equal footing with the legislation enacted by the ldaho legislature 34 Like any other statute, a statute enacted by initiative may be repealed or amended by the legislature 35 This power to make, repeal, or amend existing law is constitutronally based 3"
statute may not usurp a

28
Proposed ldaho Code 5 33-910

29 P~oposedldaho Code § 33-914

30 Proposed ldaho Code § 33-914(e)
31
An example of such language can be found in ldaho Code § 63-3024,

32 Proposed ldaho Code § 33-.914(b)

33
See Chapter 18, Title 34, ldaho Code
34
Westerbera v. Andrus, 114 ldaho 401 (1988); Sirn~sonv. Cenarrusa, 130 ldaho 609 (1997)

35 Luker v. Curtis, 64 ldaho 703 (1943); Gibbons v. Cenarrusa, 140 ldaho 316 (2002) 36 Article Ill, section I, ldaho Constitution

Secretary of State Ysursa
January 5,2006
Page 7 of 7

constitutionally granted power3' It follows that future legislatures are not effectively constrained by these provisions

CONCLUSION

I HEREBY CERTIFY that the enclosed measure has been reviewed for form, style, and matters of substantive import and that the recommendations set forth above have been communicated to the petitioner, ldaho Education Association, c/o Jim Shackelford, P . 0 Box 2638, Boise, ldaho 83701, by deposit in the U S Mail of a copy of this certificate of review,.

Sincerely,
C

LAWRENCE G WASDEN
Attorney General

Analysis by:

Theodore V Spangler, Jr
Deputy Attorney General

v. State Leqislature of ldaho, 111 ldaho 156 (1986) 37VVilliarn~