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Amendments on the ballot

What do they mean for Teton Valley?

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Posted: Wednesday, October 20, 2010 11:00 pm

Amendments to the Idaho Constitution have been rare over the last decade - there have only been five proposed since 2000. And all of those were prior to 2006.

But this year's ballot will almost double that number. Four amendments, HJR 4, 5, 7 and SJR 101, have passed the state Legislature and will each go to a public vote Nov. 2.

Three of the amendments are related and are similar in both language and purpose. HJR 4, 5 and 7 deal with certain government entities incurring debt or liability to buy equipment or construct facilities. HJR 4, 5 and 7 refer respectively to hospitals, airports and electrical systems (or power plants).

The HJR 4, 5, and 7 amendments would essentially counter a 2006 Idaho Supreme Court decision pertaining to those specific entities. Dubbed the Frazier Decision, the Supreme Court opinion in City of Boise v. Frazier narrowed the definition of "necessary" expenses on the part of public entities, making it difficult for them to incur debt.

A key part of these amendments is that debt can be incurred by these entities without a public vote. A stipulation prohibits the debt from being paid using tax dollars.

Instead, each entity must pay off the debt with revenue.

All three amendments have a vast support base in state government, and each of them passed both the Idaho Senate and House of Representatives with more than an 80 percent majority (HJR 4 and 7 were both approved with more than a 90 percent majority vote).

Teton Valley Hospital and HJR 4

“The most critical point about HJR 4 is that it gives public hospitals the ability to … seek private financing rather than … apply for a tax levy every time there’s an infrastructure needs,” Teton Valley Hospital spokesperson Ann Loyola said.

The hospital could not pay off the loan using taxpayer dollars, but instead would have to use its profits.

Loyola equated the situation to how many people finance their personal lives. If a person wanted to buy a house or a car, she said, he or she would have to show a steady stream of income in order to get a loan. He or she would also have to demonstrate the ability to pay off the loan in a designated period of time.

Most people wouldn’t own homes if they couldn’t take out loans, she said.

“I think it’s important that organizations are also able to show that they’re fiscally able to finance a loan,” Loyola said.

For example, if the hospital needed to purchase a piece of lifesaving equipment such as a CT scanner, the organization is looking at a purchase anywhere from $400,000 to $1 million.

“To ask voters to pay for that kind of upgrade every time the hospital needs something, I think, is onerous [on the taxpayers],” she said.

Specific examples of private and public funding for TVH include its expansion from 1996 through 1999, before the Frazier Decision was passed. The hospital took out about $2.2 million in private loans to finance that expansion, Loyola said. The hospital wouldn’t have been able to expand without the ability to incur private debt. The recent hospital levy, designated for TVH infrastructure, may not be necessary in the future with the passage of HJR 4, Loyola said, because the hospital could get private funding for that.

The way things are under the Frazier Decision, organizations have to pay back debts within 12 months of incurring the them, something that is largely impossible.

“That’s why [recently] so many public hospitals are moving away [from that model] and becoming nonprofits,” said Loyola.

HJR 5 and 7 and SJR 101

The HJR 5 amendment would essentially overturn the Frazier Decision for airports. It would allow an airport like the Driggs-Reed Memorial Airport north of Driggs to incur long-term debt.

“So far we haven’t done that out there,” Driggs Mayor Dan Powers said. “We haven’t had the need.”

HJR 7 would do the same for cities with power plants, such as Idaho Falls.

SJR 101 pertains to the University of Idaho. It would allow the State Board of Regents to set tuition rates there.

For additional information on these amendments visit tetoncountyidaho.gov.

To contact Lisa Nyren e-mail editor@tetonvalleynews.net.

 

 

 

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