Judge invalidates Idaho Falls’ $33 million levy for a new school

Originally posted on IdahoEdNews.org on November 17, 2023

IDAHO FALLS — A 10-year, $33 million levy that would have financed a new elementary school in the Idaho Falls School District is invalid, an Ada County judge ruled Wednesday. 

The school financing measure, which nearly 70% of voters approved in May, is null and void and taxes will not be collected, according to Randy Neal, the Bonneville County prosecutor. 

“We are very disappointed in the court’s ruling,” Margaret Wimborne, the spokesperson for the district, wrote in a statement. “D91’s parents and patrons clearly supported this levy as a way to address the district’s ongoing facilities issues … It’s frustrating that the directive of our local taxpayers has been challenged by the Idaho Idaho Tax Commission and dismissed by the courts.”

It was the district’s second plant facilities levy, and only one can be on the books at a time, the State Tax Commission ruled in August when it denied the measure. But Idaho Falls trustees fought the decision in court, arguing that both levies were valid because, even when combined, they still met two legal requirements spelled out in Idaho code:

• They did not exceed .4% of the district’s market value
• They did not exceed 10 years 

But District Judge James Cawthon sided with the Tax Commission, putting an end to months of litigation, as first reported by Local News 8. 

“We appreciate the Court making this decision so quickly, because there would have been a substantial financial impact on the county if we would have been required to change tax notices which are due next week,” Neal said in a press release.

RELATED | D91 elementary school levy declared illegal and voided by district judge

Attorney General Raúl Labrador weighed in on the ruling as well: “Idaho law places limitations on the creation of school levies. The (Idaho Falls levy) did not comply with those limitations. I am please that the District Court agreed with the legal opinion we issued in August.”

Idaho Falls trustees will “meet soon to discuss next steps,” Wimborne said. 

In September, Idaho Falls Superintendent Karla LaOrange told EdNews that “if for some reason the district does not prevail in this case, then we have a clear reason and justification for going back to the voters.”

Trustees have a few options going forward, according to Neal:

• Rerun the levy as a bond in the May election (the next possible opportunity, since the Legislature eradicated the March school election date)
  • A supermajority of 66.67% approval would be required for the measure to pass 
• Ask voters to amend the first (and now only) plant facilities levy so taxes are increased for the elementary. 
  • However, that levy (which expires in 2032), would only have eight years left on its term. To provide $33 million in that shorter time frame, taxpayers would have to dole out more each year. 
  • The required threshold for approval would depend on how much the district asked for. 

The new elementary school would have alleviated overcrowding in the district — an issue trustees have been trying to address for more than a year. 

“The Board of Trustees is committed to addressing its critical facilities issues and ensuring that every student in Idaho Falls School District 91 can learn in an environment that is safe and meets their needs,” Wimborne said.

Using plant facilities levies — rather than bonds — to fund new school buildings is a relatively new approach that is becoming more common in Idaho districts. The levies can be an attractive option because their voter approval threshold can be as low as 55% (as compared to bonds’ required 66.67%). 

But there are drawbacks — for example, districts that opt for a plant facilities levy do not qualify for state financial assistance via the bond and levy equalization program.

Still, it’s an option Idaho Falls trustees turned to after a $250 million million bond failed last November with just 58% support. (In hindsight, their much-reduced ask for a $33 million levy the following spring would’ve easily passed as a bond with 69.6% support.)

This week’s ruling might dissuade other districts from following suit by seeking a levy for new construction.

Just last week, when Pocatello/Chubbuck school leaders met to discuss next steps after a failed $45 million bond, Pocatello/Chubbuck’s director of business operations, Jonathan Balls, cited Idaho Falls’ litigation when a trustee asked about the possibility of running a levy for construction. 

“As (Bonds) have been failing, people are getting very creative,” Balls said, before cautioning trustees. “If you notice our good neighbors and friends to the north in Idaho Falls, theirs is stuck in the courts.”

In Idaho, 43 of 59 proposed bonds — or 72% — have failed since 2019.

The district is also involved in a second legal battle: Neal charged former Idaho Falls Superintendent James Shank and Wimborne for inappropriately using public funds to promote 2022’s $250 million bond issue that ultimately failed. The litigation is ongoing. 

Idaho Education News data analyst Randy Schrader contributed to this report.