Property tax relief moves to House floor
by Logan Finney, Idaho Reports
The House Revenue & Taxation Committee approved a bill Monday that would establish two new state funds with the goal of providing residential property tax relief.
Committee chairman Rep. Jason Monks, R-Meridian, and joint budget committee co-chair Sen. C. Scott Grow, R-Eagle, presented the package. They worked with House Speaker Mike Moyle, R-Star, and Senate tax chairman Sen. Doug Ricks, R-Rexburg, to draft earlier property tax legislation into a compromise bill.
“The four of us have spent a lot of time visiting together over the last six to eight weeks,” Grow said.
Who would get relief?
House Bill 292 would offer property tax relief via two avenues: bond and levy payments for schools, and property tax credits for homeowners.
The first pot of money the bill would create is a school districts facilities fund, which would be divided and distributed to school districts based on average daily attendance. Schools would first be required to use the money to make their existing bond and levy payments, which should reduce property taxes.
School districts without bonds and levies could save the money for future construction or renovations. They could also use the funds to secure future facilities bonds rather than going to property taxpayers.
The second pot of money is a homeowner property tax relief account that would be distributed as a tax credit to residents with owner-occupied primary homes that qualify for the homeowners exemption.
The bill does not include school bonds and levies as “eligible” property taxes in the credit calculations – in other words, the state won’t pay for the local taxes that homeowners had a chance to vote on.
“That’s what you call a compromise, right?” Grow said.
The property tax credit and bond/levy payments would appear in a combined line item as “tax relief appropriated by the Legislature” on each homeowner’s property tax notice.
The bill also relaxes some eligibility requirements for the circuit breaker, a program through which the state pays a portion of property tax bills for certain people, such as widows and people with disabilities.
What do local officials think?
Property taxes are assessed, collected and spent at the local level – one of lawmakers’ favorite refrains.
Canyon County Controller Zach Wagoner said even though his county reduced its overall property tax burden by $14 million this year, their residents still saw property taxes increase.
He estimated the tax credit would be about $500 for most Canyon County residents, but that would vary depending on which school district they live in and how much they are taxed for bonds and levies.
“The more taxes you pay to the school, the smaller your homeowners credit,” Wagoner pointed out.
The most controversial component of the bill does not have to do with taxes directly, but instead the occasions on which school districts can ask for them. The bill would eliminate the March election for bonds and levies, leaving opportunities in May, August and November for schools to run ballot issues.
According to the Secretary of State’s office, 46 school districts across 40 counties are holding bond and levy elections this Tuesday on the March election date.
Idaho School Boards Association government affairs director Quinn Perry spoke against removing the March election on behalf of the school boards and the Idaho Association of School Administrators.
“We maintain that all dates are necessary for schools,” the associations said Friday in a joint statement with the Idaho Education Association. “However, if a date must go, we respectfully request the legislature remove the August election date, which is less consequential to maintaining regular operations of our public schools.”
The Association of Idaho Cities expresses support for the bill in its online legislation tracker.
What do lawmakers think?
The bill generally received support from lawmakers on the tax committee, who said property tax relief is the number one topic they hear about from constituents.
“We can’t write a bill for each county and district. The bill has to do what it does statewide, and I think it really hits the target,” said Rep. Douglas Pickett, R-Oakley.
Minority Leader Rep. Lauren Necochea, D-Boise, said she was unable to support the overall package because it does not raise or index the homeowners exemption, as well as the election dates issue.
“I wish we didn’t need supplemental levies. I wish we didn’t need the March date at all,” Necochea said. “There’s a poison pill in this bill that I cannot support.”
The “enhanced funding for education at the state level can mitigate the need for reliance on local property taxpayers for school operations and facility costs and thereby also reduce the number of dates needed for holding school levy and bond elections,” the bill’s legislative intent language says.
“The change in the election dates had not been popular,” acknowledged Rep. Kenny Wroten, R-Nampa. “If we wait for perfect, it’s just never going to happen.”
The committee sent the bill to the House floor with only Necochea voting against the motion.
Where’s the money coming from?
The bill includes a one-time transfer of $75 million in surplus from the general fund, and it would create a three-year surplus eliminator that would shunt up to $150 million each year toward the relief funds.
A surplus eliminator would transfer money out of the state general fund if the balance is higher than lawmakers anticipated to carry over at the end of the fiscal year. The legislature has used a similar surplus eliminator mechanism in the past decade to fund transportation needs.
Starting this July in the new fiscal year, 4.5% of annual sales tax revenue would be directed toward the relief package. As that revenue starts to accumulate, lawmakers will tap into leftover income tax rebate funds to begin the property tax relief this year.
“There’s still money left over to the tune of $130 million,” Monks said.
The package would start to use tax relief revenue from online sales taxes in its third year. Lawmakers are currently using that existing tax relief fund for a two-year overhaul of the public defense system.
“It does it a little differently each year, and there’s a reason we have to do it differently each year,” Monks explained.
The bill now goes to the full House for consideration.
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.