From the April 2002 Idaho Observer:
State Supreme Court to decide constitutionality of resort county tax used to fund K-county jail expansion
Only those who paid under protest would receive refunds
By The Idaho Observer
BOISE -- If what took place in the courtroom is any indication, the Idaho State Supreme Court will declare the Resort County Optional Sales Tax unconstitutional. Witnesses report that justices Eisman Walters and Copple-Trout were obviously critical of the .5 percent tax which has been used to fund a $12 million jail expansion project.
The controversy began in spring, 2000, when the Kootenai county commissioners announced they were building a jail and that people could choose a property tax increase or a sales tax increase to pay for it (The Idaho Observer, May, August, 2000).
Kootenai County taxpayers decided not to fund a jail by popular vote.
Concerned Taxpayers of Kootenai County (CTKC) was formed to oppose the jail expansion and use of the Resort County Optional Sales Tax that was being promoted to fund it. The group began investigating the proposal and found that the entire issue was riddled with fraud and was driven by special interests.
One of the many items of conflict unearthed by CTKC was the sordid history of the sales tax itself. To even the most casual observer, the tax was obviously intended to apply only to Kootenai county. The law says the tax can only be applied to counties with populations in excess of 80,000 and which are within 50 miles of a county with over 350,000 people.
Why didn't they do something simple like say all counties that start with a 'K' can use this? Justice Jesse Walters asked sarcastically.
The Idaho State Constitution forbids the passage of, local and special legislation, presumably to prevent the legislature from using its lawmaking authority to grant special favors to its members special friends.
CTKC attorney Scott Reed explained to the court how Post Falls attorney Chuck Lempesis was hired by the county to lobby for passage of the bill which created the tax. He said the only reason the bill passed was because legislators were assured it would only affect Kootenai county. This case is Kootenai county only, written in Kootenai county, sponsored in Kootenai county, he said.
Reed also told justices that the tax was intended, ...to fund a jail disguised as a resort tax.
In August, 2000, before a packed courtroom, District Judge Charles Hosack showed disdain for the county and its disingenuous arguments in favor of the resort-tax to-fund-a-jail project argument. Then he upheld the county's position and legislated from the bench by merely removing the 80,000 population minimum.
Judge Hosack altered the intent of the legislature by availing other resort counties such as Bonner and Boundary of the ability to implement an unconstitutional tax on its citizens.
CTKC member and Libertarian candidate for county commissioner Tom Macy and Neadda Baird drove from Post Falls to Boise to attend the proceeding in the state's high court. Macy noted that the justices changed the demeanor of county counsel James Davis, a Boise attorney, from confident and arrogant to uncertain and bewildered with a few comments.
The gist of it all was that Davis and the county believe the ends justify the means -- that it is okay to implement an unconstitutional tax if it means building a jail that no one wanted to pay for in the first place.
First term Kootenai County Commissioner Gus Johnson believes that, regardless of the tax's constitutionality, it has been a good thing for taxpayers. Johnson warned that if the Supreme Court reverses the tax the county will inevitably raise property taxes to fund the jail.
The Spokesman-Review reported that if the Supreme Court overturns the law, the county will not have to pay back the $6 million it has already collected from county businesses, ...except for a small amount that would be due taxpayers who filed formal protests, the Spokesman reported.
CTKC passed out flyers to some 800 Kootenai County businesses during the summer of 2000, urging business owners to protest the tax. We have no idea how many of those 800 or so businesses chose to file a formal protest of the tax, but I bet all of them wish they had now, said Macy.
The Supreme Court will issue a written ruling once it makes a decision.
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