by Logan Finney and Melissa Davlin, Idaho Reports
A $600 million income tax cut and rebate package was the first bill introduced this session, and has been the focus of lawmakers’ tax relief efforts thus far. It passed the Senate on Tuesday and is now headed to the governor’s desk.
According to a recent Boise State University public policy survey, roughly 37% of Idahoans said the state’s budget surplus should be put toward income tax relief, while another 37% said property tax relief.
Last year’s sweeping property tax reform bill, House Bill 389, made a number of tweaks to various areas of the property tax system.
One such program was the circuit breaker, an income-based property tax reduction program in which the state pays a portion of property taxes for seniors, widows and people with certain disabilities.
HB 389 changed the amount of circuit breaker assistance, increasing it from a range of $150 to $1,320 to a range of $250 to $1,500. However, the new law also imposed a price cap on homes that qualify for the program. That provision now excludes homes that are valued at 125% or higher of the county median assessed home value.
That cap went into effect on January 1, 2022, but applications for the program are not due until mid-April, which means the legislature has a short window of opportunity to change the limit. Two such bills have been introduced so far:
Senate Bill 1241 from Sen. Regina Bayer, R-Meridian, would raise the cap to 200% of the county median home value. The Senate tax committee passed the bill unanimously Tuesday afternoon after positive testimony from several county assessors and local officials.
“As sale prices continue to skyrocket around Idaho,” Elmore County Assessor Josh Dison said, “we’re seeing people pushed off of this program, as the senator said, at no fault of their own.”
“We’re going to put them both out there, see which one makes it, and cheers the one that does,” Shepherd told Idaho Reports on Wednesday.
Other lawmakers have introduced legislation on property taxes as well.
Rep. Lauren Necochea, D-Boise, has introduced a personal bill that would remove the home value limitation altogether, and expand eligibility for the circuit breaker program to all Idahoans regardless of age. That bill has been referred to the House Ways and Means committee, which means it likely will not receive a hearing.
The Senate tax committee also unanimously passed Senate Bill 1249 by Sen. Jim Rice, R-Caldwell, which he described as a simple “cleanup bill” for how HB 389 changed local governments’ budget calculations with expiring urban renewal districts and foregone balances.
In the Senate Health and Welfare committee, Sen. Melissa Wintrow, D-Boise, introduced legislation that would exempt Medicaid income from counting against income for owners of Certified Family Homes, or homes that provide a family-style living environment for adults with physical or developmental disabilities who need help with some aspects of daily life.
The idea, Wintrow said, was to make sure owners of those Certified Family Homes wouldn’t get bumped off the circuit breaker program.
“For a Certified Family Home, you actually get a reimbursement from Medicaid to take care of that individual in your home, for their learning outcomes as well as daily care activities,” Wintrow told the committee. While the federal government doesn’t count those Medicaid reimbursements as taxable income, the state does, prompting a constituent to contact Wintrow with concerns.
“What was happening is the Medicaid reimbursement was adding to her income and bumping her over the circuit breaker,” she said.
Wintrow estimated that Senate Bill 1259 would cost the state about $350,000 annually, and said there are currently about 2,500 Certified Family Homes that serve more than 3,000 adults in the state. A similar bill was rejected by the House last year.