Idahoans Are Getting Screwed on Property Tax Relief

Idahoans have been suffering from increases in property tax, especially over the last few years. The cost of people moving here from out of state, and the impact that has on our city infrastructures has only added to this burden. There are two bills currently being held in committees that would help ease the burden on Idahoans, yet they are not being discussed in the committee, which means Idahoans are not being represented.

The Property Tax Fairness Act

Rep. Skaug’s property tax bill HB 78 is an easy bill to understand and will reduce the heavy burden of increasing property taxes in Idaho. “In 2016, indexing was removed from the formula resulting in a significant shift of the property tax burden to owner-occupied residential properties.” “The Property Tax Fairness Act restores an annual index, based on the sales prices of Idaho homes, to calculate the maximum homeowner’s exemption amount and establishes an initial exemption of $224,360, as if the indexing factor had not been removed in 2016.” Rep. Skaug’s bill would reinstate and restore the homeowner’s property tax exemption index and begin to incrementally shift the residential property tax burden back from the residential category to commercial and industrial

Even though this bill has been referred to the Revenue & Taxation committee, Chairman Jason Monks has chosen to “put it in the drawer”, along with three other property tax bills, which does not allow for any discussion by the committee. What is the purpose of doing this? If enacted, HB 78 will reverse some of the devastating effects Idahoans have been experiencing from rising property tax.

Current Speaker Mike Moyle’s 2021 bill capped the Homeowner’s exemption at $125,000, or 50% of the value which ever is less which shifted the property tax burden from commercial and industry to residential property owners. Rep. Skaug’s bill raises that exemption for homeowners. During the 2022 legislative session, Speaker Moyle’s property tax bill, HB 389, passed which essentially shifted more of the property tax burden from commercial to residential homeowners, which every property owner has felt this year.

Is the Speaker deliberately telling the chair to hold all property tax bills to protect his prior bill in keeping commercial and industrial property taxes low, which is what HB 389 did? Who has their fingers in Speaker Moyle’s pockets?

Contact Rep. Monks here, and the Revenue & Tax Committee here. Speaker Moyle can be contacted here. Let them know holding HB 78 is not acceptable and it is expected that it will be discussed in committee with a do pass recommendation. Tell Speaker Moyle it is not appreciated that he runs the House that condones this unacceptable behavior. It is time the legislature took action to reduce the unfair property taxes that shift the burden from commercial and industrial businesses to residential homeowners.

Development Impact Fees

There is another bill being held in committee. Senate bill 1060 is a bill that “adds public schools to the list of public facilities and school districts to the list of government entities allowed to use the statutory development impact fee mechanism to fund capital improvements attributable to new growth and development.”

Because impact fees are not currently collected by the developer, and subsequently paid for by the home purchaser, the needed school funding is passed on to current homeowners with a resulting increase in property taxes. Currently, school districts use school bonds in each district to cover that growth and recover the costs that new development creates for the increased number of students and capital improvements. If school bonds do not pass then it is a loss for the schools. If the impact fees were collected by the developer and paid for by the purchaser of the home, there would be a decreased need for school bonding and resulting decrease in property taxes. This only makes sense, as growth occurs, those who move into that new growth should pay for the impacts on the city.

This bill is highly necessary. During the last 4 years Idaho’s exploding population has increased by some 308,000 new Idaho citizens. Statistically, this includes 63,460+- school-age children and will require many new K-12 schools. At the present construction costs of $8,176,000 each for the buildings alone, site not included in that number. This will require a total of $1.29 billion that can only be paid for by an increase in your property taxes. Had impact fees been allowed they would have paid for the schools. Only the legislature can make new growth pay for itself by allowing impact fees for schools.

For this bill it is Chairman Sen. Doug Ricks of the Local Government and Taxation Committee who is holding the bill in a drawer. There is no reason for this bill to be held and not discussed by the committee. The bill clearly provides some property tax relief.

Contact Chairman Ricks here and the Senate Committee here, and demand that this bill is read by the committee with a do pass recommendation. The cost of growth in Idaho is a burden on property tax payers and new homeowners coming in from out of state should be accountable for the impacts that has on our communities. Idahoans should not be bearing that cost.