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BOISE -- Cities, counties and school boards rejected Gov. Butch Otter's proposal to dump Idaho's $140 million personal property tax, drawing a bold battle line for one of the 2013 Legislature's marquee issues.

The Idaho Association of Counties, the Association of Idaho Cities and the Idaho School Boards Association objected to what they believe will be a significant shift of about $40 million to other taxpayers, including homeowners.

In a letter to Otter, they also said the proposal to eliminate the tax by 2020 creates an untenable burden on Idaho's general fund.

The three groups support triggering a not-yet-enacted 2008 law to exempt the first $100,000 in business personal property.

That would cost the state $20 million annually, but would eliminate the tax for about 89 percent of businesses in Idaho.

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