COEUR d'ALENE - The issue of sitting on $13.5 million in foregone taxing authority has haunted the Kootenai Hospital District recently, but it's a moot point now.

According to the Idaho State Tax Commission records the district has only accrued $61,391 in forgone taxing authority.

"I don't know where that $13.5 million figure came from, but frankly I find that hard to believe," said Alan Dornfest, property tax policy bureau chief for the commission, in an interview this week. "At the current time, I'm showing $61,391; if someone is saying something different, I would have to see evidence of that."

So where did that number come from?

Kim Webb, chief financial officer for Kootenai Medical Center, thinks she knows where the $13.5 million figure originated.

Every year the former CFO of the hospital used to calculate the amount of taxes that the hospital board could have collected if it had used its full taxing authority over a period of about 18 years.

"He would present it to the board each year to show them how much money we were saving the taxpayers by not levying taxes," Webb said, adding that usually occurred when the board met to decide each year if it was going to use its authority.

The district did use some of its taxing authority in 1994 to raise a one-time total of $442,430 to help expand the hospital. In 1995 the district dropped its tax rate back to $0, and it hasn't collected a tax since then.

If the district had continued to collect the full amount of taxes allowed by law, and increased it by the maximum 3 percent each year, the total would have been roughly $13.5 million.

But, Webb said, that is not the amount of the foregone taxing authority the district can collect now. The forgone amount is only the 3 percent that the board could have increased each year over the original base amount of $442,430 during that time period, which totals $61,391.

"And that is all we would allow them to take at this point if they were to decide to take their foregone balance now," Dornfest confirmed.

Kootenai Health CEO Jon Ness said the $13.5 million figure erroneously took on a life of its own and started showing up in news articles and public forums as the district's official foregone balance.

Ness said the figure first caught the attention of the administration when it was used in a Coeur d'Alene Press editorial that ran on Dec. 26, 2012. Then, during Idaho's legislative session, politicians began repeating the figure to illustrate a need to somehow cap the amount of taxing authority that Idaho's taxing districts could accrue as a foregone balance.

"Then frankly, the Reagan Republicans took that and ran with it," Ness said, explaining that it has now become political fodder in the hospital district election. "It's all moot. Now everyone can step back and take a deep breath."

Jeff Ward, president of the Reagan Republicans, said it was good to hear that the hospital doesn't have as much taxing authority as everyone first thought, but that is not the only reason his group is backing two candidates in the district race.

"There is more to the fiscal issue than just taxing authority," he said. "They are sitting on about $150 million surplus, isn't that an indication that they may be charging too much?"

Ward said his group is also concerned about a number of issues concerning the hospital and its tax exempt status.

Liese Razzeto, who is the only incumbent board member running in the May 21 hospital board election, has addressed the hospital's surplus before, explaining that the district holds a surplus to ensure a favorable bond rating in the event the hospital has to expand in the future.

As for the foregone tax issue, she said Ness summed it up well for her when he dubbed the issue an "urban myth."

Still, Razzeto, who is the finance chair and secretary treasurer of the board, was relieved to hear the foregone balance issue was resolved.

"In reality, we would not have gone back to take them anyway," she said. "Now the story is financial stewardship."

Razzeto said she is going to continue her focus on educating the community on how the board is managing the hospital's fiscal health while ensuring the hospital continues to deliver quality healthcare to its patients.

"That isn't by accident either," she said. "We've done that by controlling costs, while keeping healthcare costs low for our residents - even through very difficult times."