Idahoans Need a Better Property Tax Break

As the weather turns cold, Idaho legislators are preparing for the start of the legislative session in January. Many are already hard at work on new laws designed to improve the lives of Idahoans. But there are proposals afoot that could cause real harm to taxpayers and local communities.

Last session, recognizing the impact of rising home values on property taxes, we tried to advance a bill to remove the cap on the homeowner’s exemption. That bill could not even get a hearing. Since then, legislators have gotten an earful from constituents about the rising cost of property taxes. Legislative leadership has appointed a working group to look at property taxes. That group will meet for the first time on October 21. The rhetoric we hear about city budgets being to blame for increases is misplaced. We urge the working group to look long and hard at the tremendous upward pressure state decisions and mandates put on local property taxes.

Over one third of tax bills in Ada County are bonds and levies for schools. These are necessary because of the legislature’s refusal to adequately fund education. Claims that funding has caught up with pre-recession levels don’t factor in inflation or Idaho’s incredible population growth. In 2018, with the opportunity to increase education funding by 100 million dollars, the legislative majority instead chose to cut the income taxes of wealthy Idahoans and over tax larger families. In 2015, the legislature capped the homeowner’s exemption resulting in a large shift of the property tax burden from commercial properties to homeowners. Indeed, Idaho homeowners are now paying over 60% (70% in Ada County) of the real property taxes collected in the state. And this summer an interim legislative committee is attempting to force county property taxpayers to cover the cost of the state’s match for Medicaid expansion.

There are 200 cities in the state of Idaho, each with their own challenges. And those challenges are properly worked out at the local level. The legislature has already put strict limits on local budgets and should be trying to provide genuine property tax relief, not crippling local budgets for police, fire, emergency medical services, jails, parks and recreation, senior centers, homeless services, suicide prevention and mental health treatment, substance abuse treatment, transportation, the environment, our schools and community college.

What does genuine tax relief look like? It’s restoring the homeowner’s exemption and once again indexing it against skyrocketing property values. It’s assuring that the state’s circuit breaker property tax relief program for low income seniors, the disabled and our veterans catches up with, and stays current with inflation. It’s income tax credits to reduce the property tax costs faced by renters and those who own their primary residences. And it’s reforming the state impact fee law so that growth actually does pay for itself.

Legislative level decisions have, directly or indirectly had a negative effect on property taxes all across the state. It is on that that we believe the working group and the Legislature should focus, not on limiting the ability of our local citizens to meet their local needs through their local governments.