Lawmakers ready to tackle property taxes
by Logan Finney, Idaho Reports
The House Revenue & Taxation Committee introduced three long-awaited bills on Thursday as lawmakers hope this is the session they will finally address residential property taxes. The competing legislation offers insight into differing opinions on how to fix the issue and who the state should focus on helping.
Grow: “Laser-focused relief to homeowners.”
Sen. C. Scott Grow, R-Eagle, said he is excited that the legislature is ready to address property taxes after focusing on income tax reductions for the last several years.
“I’ve been working for years trying to get some property tax relief,” Grow said. “In all my years as a CPA, I’ve never had any clients complain about Idaho income tax.”
His bill would direct 4.5% of state sales tax revenue toward property tax relief for owner-occupied residences, excluding voter-approved property taxes like school bonds and levies.
The state would distribute the funds to local taxing districts, which would appear as a credit on the homeowner’s annual property tax bill.
“When assessed values or levy rates change, they can go up, down, sideways, whatever. We’re focusing on the tax,” Grow said. “My ask is that we get laser-focused relief to homeowners.”
Skaug: “We know how it works.”
Rep. Bruce Skaug, R-Nampa, echoed Grow’s sentiments about delivering results for constituents.
“They wanted relief last year, they wanted it the year before, and we did not deliver,” Skaug said.
Idaho’s homeowners exemption was created via ballot initiative in 1982 and exempted 50% of the value of a home up to $50,000. Lawmakers in 2006 set the maximum exemption at $75,000 and indexed it to rise with home prices. In 2016, they adjusted the exemption to $100,000 and removed the indexing.
Since then, residential property tax bills have increased rapidly while agricultural and commercial properties have generally seen stable or decreasing property taxes.
“Nothing against big corporations, but they have benefitted greatly,” Skaug said Thursday.
Skaug struggled to get an introductory hearing to re-index the homeowners exemption in prior sessions, despite bipartisan support and dozens of cosponsors. His bill this year would raise the exemption to $224,360 “as if the indexing factor had not been removed” and link it to the federal all-transactions house price index for Idaho.
“We know what it is, we know what it does, and we know how it works,” Skaug said.
House Speaker Mike Moyle, R-Star, is generally opposed to re-indexing the homeowners exemption as a property tax solution because, in his view, it simply redistributes property taxes back to the same homeowners in communities without enough commercial or agricultural properties.
Moyle: “Get as much done as we can.”
A wide-ranging proposal from Moyle would establish a new fund distributed to local school districts to pay down bonds and levies, address health and safety issues, and save for future facility construction.
“We have school districts across the state – some that refuse to pass bonds, concerned over property taxes – that have issues,” Moyle said.
The bill would pull funds from several sources to establish a new School Districts Facilities Fund, including the state’s general fund surplus, education funding from the special session in September, sales tax revenue from physical and online retailers, and leftover income tax rebate funds.
It would also raise the un-indexed homeowners exemption to $150,000, increase cutoffs for the circuit breaker program, and eliminate March and August school election dates. The bill also would have the state cover the full funding stream for public defense established last year rather than pulling part from cities’ and counties’ sales tax distributions.
“If there’s something standalone, it’s easier for somebody to attack. If you have it together where they all feel a little love and a little concern, it makes it easier to pass,” Moyle said. “I’d like to get as much done as we can.”
Moyle has faced past criticism for his wide-ranging tax bills. He sponsored the controversial HB 389 in 2021, which Gov. Brad Little called “an aggregate of complex and nuanced changes” at the time.
Monks: “Where our caucus wants to go.”
Tax chairman Rep. Jason Monks, R-Meridian, told Idaho Reports he does not know yet when the committee will hold public hearings on the bills. He acknowledged he is a cosponsor on Moyle’s bill, but said he wants to give all three a fair shot.
“More importantly than just me, the Speaker, Sen. Grow and Rep. Skaug working together is finding out where our caucus wants to go, or the committee wants to go,” Monks told Idaho Reports. “They’re the ones who will be the ones deciding.”
Logan Finney | Associate Producer
Logan Finney is a North Idaho native with a passion for media production and boring government meetings. He grew up skiing, hunting and hiking in the mountains of Bonner County and has maintained a lifelong interest in the state’s geography, history and politics. Logan joined the Idaho Reports team in 2020 as a legislative session intern and stayed to cover the COVID-19 pandemic. He was hired as an associate producer in 2021 and they haven’t been able to get rid of him since.