Driving assessment

Idaho lawmakers seek ideas on property tax reform

When Idaho lawmakers began drafting a new property tax bill, they brought in city officials, but the relationship quickly soured, according to a representative.

CALDWELL, Idaho- This article originally appeared in the Idaho Press.

When Idaho lawmakers began working on HB 389, a property tax bill, they brought city officials to meetings for comment.

But that working relationship quickly soured, said Idaho Rep. Mike Moyle, the bill’s author and main sponsor.

“When the city officials arrived and everything was, ‘No; we are going to kill him in the Senate; we don’t care what you do; we killed him in the Senate before; we’re going to do it again’…we left them out after that,” Moyle said.

Moyle, along with Sen. C. Scott Grow and Sen. Jim Rice, hosted a roundtable on Thursday with mayors and county staff from across Treasure Valley to discuss this bill and what can be done to provide more property tax relief that works for cities. City officials from Boise, Caldwell, Eagle, Greenleaf, Nampa, Star and others attended the roundtable at the Canyon County Public Administration Building.

Grow hosted meetings with stakeholders such as the Idaho Farm Bureau, Idaho Association of Cities, and Idaho Association of Counties.

The effort is made to try to find solutions to the question of the property tax. Property taxes continue to rise in Idaho and are putting pressure on homeowners across the state. The topic continues to be hotly debated among locals and those in the political sphere of the state.

“We’re trying to have a band that can actually get something done and not get bogged down in so many ideas and so many conflicts and disagreements between different bands that there’s nothing we can do,” Grow said.

House Bill 389 passed in the 2021 legislative session, despite bipartisan opposition and pushback from local leaders. The law brought about various changes, including increasing the homeowner’s exemption from $100,000 to $125,000 and increasing the “circuit breaker” tax, which benefits low-income seniors and veterans. .

The bill also specified an 8% cap on city budget growth each year, including a 5% cap on new construction and an overall increase of 3%.

Prior to the bill’s passage, some lawmakers argued that it did not provide property tax relief like indexing property taxes to house prices would. And it would not allow tax districts to keep services growing.

During Thursday’s roundtable, lawmakers expressed skepticism over calls to index the owner’s exemption. Rice said it tended to affect tenants, “which is a problem.” Rice said he and lawmakers are looking to stakeholders and voters for other solutions. (Rice recently lost the Republican primary race in District 9 to Abby Lee.)

Moyle said he hopes solutions on property tax will come from cities and other local stakeholders, and said the press has “done a good job blaming the Legislature for the problem.”

“As we talk about this, it’s important that we all realize that the state doesn’t collect (property tax), the state doesn’t spend (property tax),” he said. “The only thing we can do is put constraints on it, which HB 389 did a bit.”

On Thursday, city leaders expressed concern about how the law is affecting their communities.

Mayor of Greenleaf, Brad Holton, who strongly criticized the impact of the bill, said it had hurt his city’s ability to accommodate desperately needed new housing due to the 8% cap on budget growth.

The law requires the city to consider halting construction, a move that would help the city avoid creating two classes of people: those who fund city services and those who don’t, Holton said. This latter group would be above the 8% cap.

“The 8% cap is la-la land for the town of Greenleaf,” Holton said. “It was two houses this last time. Two houses. And I’m going to go upside beyond that point on my budget.

Greenleaf’s situation is representative of 160 other small communities in Idaho, Holton said. The law has driven a wedge between big cities that benefit from the law and smaller ones that don’t, he said.

“This is really the police and fire funding bill of the Idaho Legislature,” he said.

Last year, the town of Caldwell passed a 120-day moratorium on development after the bill passed.

Nampa chief of staff Rick Hogaboam wondered why lawmakers wouldn’t consider indexing the homeowners’ exemption as a solution, though he acknowledged it wouldn’t entirely solve the problem. Her father, a Vietnam War veteran, pays more property taxes than he did five years ago, Hogaboam said. Local businesses pay less property tax than their landlord counterparts, he said. But indexing would allow his dad to pay less and a local Walmart to pay more than they do now, even though Walmart’s taxes would still be lower than they were five years ago, a- he declared.

Having conversations with residents about their property taxes is difficult, Hogaboam said.

“You have brilliant people who are like, ‘OK, what are the variables that drive these different outcomes?’ And we’re saying that these are assessed values, and that the rules are not made by the city, and that the county is constrained to only do what it’s mandated by the Constitution, that the rules are made by a way that created these results…it’s really frustrating,” he said.

Caldwell Mayor Jarom Wagoner echoed the sentiment regarding the stark difference between residential and commercial property taxes.

“The value of our levies is going down, but the (value) of the owners’ properties has gone up so much faster, that this levy, even though it’s lower, they’re paying more, and the commercial… just steadily increasing so that lower levies affect them where they pay much less,” Wagoner said.

Boise Mayor Lauren McLean has called for a review of assessment policy to narrow the gap between residential and commercial property tax rates. In some cases, the valuation of some big-box stores hasn’t changed in the past five years, she said.

When her office asked the appraiser to explain this, the appraiser points to publicly available data on the Multiple Listing Service showing why people are selling their homes, she said. However, there is no similar data readily available for commercial real estate, she said.

But when McLean has gone to commercial real estate conferences, the feeling is “you gotta have money; things sell in days; people line up; everyone wants retail,” she said.

This information is not reflected in ongoing assessments, she said.

“A lot of us talk about the need to look at reviews because someone is paying, and right now it’s a homeowner or a retiree or a veterinarian, not a Walmart,” McLean said, suggesting that the government policy on assessments might solve this problem. .

Grow said ahead of next year’s legislative session, it was time to discuss policymaking with lawmakers. It’s when lawmakers have “time to listen to people,” he said.

“Ideas need to be explored before we get there so we have an idea of ​​what we’re going to come up with,” Grow said.

This article originally appeared in the Idaho Press. Read more on IdahoPress.com

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