The Idaho Legislature's latest move to fulfill their campaign promises of lowering the state's property tax burden has hit a significant roadblock. If you believe this sounds familiar because it is. The same city leaders use the same arguments they used last year to send Senate Bill 1108 to its predecessor's same fate.  

Mayors from every part of the Gem State held a virtual press conference yesterday lobbying legislators to scrap this bill. The argument is like that song, 'it's the same old song and dance.' Legislators want cities to work within a cap on property tax revenue. They argue that cities should be managed more efficiently. Mayors say they will have to cut essential services like the Fire and Police Departments. Earlier this week, we had a microcosm of the statewide debate. Nampa Fire Chief Kirk Carpenter called in to express his concern for the bill. Senator Jim Rice joined us in response, and Nampa Mayor Debbie Kling called in after the senator.  

It's the very least disappointing the state elected officials haven't developed a plan to get buy-in from Idaho cities. Remember, they've had a year after last year's version was shot down. Sadly, I don't believe we will see any type of property tax relief this year. The Superfriends of mayors released the following reasons to oppose Senate Bill 1108.

  1. Focusing solely on budget growth is to ignore the root cause of property tax growth for homeowners: the burden shift from commercial properties to residential properties, the fixed cap on the homeowners' exemption, and underfunded schools struggling to respond to exponential growth.
    1. SB 1108 would have a detrimental impact on local municipal governments by restricting revenues collected through new construction rolls and retiring urban renewal districts – essentially prohibiting growth paying for growth. Both of these revenue streams are instrumental in providing a revenue base to maintain existing city service levels – such as public safety, water resources, parks maintenance, etc. – to a rapidly growing community.
    2. While members of the Treasure Valley Partnership strongly support providing relief to residential property taxpayers, capping local government revenue streams is a misguided focus that will only result in a loss of critical city services that our residents deserve and expect, while ultimately failing to deliver residential property tax relief.

 

  1. Restrictions on a city's budget will not result in a decrease in residential property taxes and ignores the ongoing tax burden shift from commercial to residential.
    1. Budget caps: The City of Boise took a 0% base increase in property tax due to several cost savings measures that resulted in a year over year reduction of 1.1% in the total General Fund Budget. Despite the budget reduction, the owner of an average priced home would have still seen an increase of $37.82 (2.9%) in their property tax budget if not for the City's participation in Governor Little's one-time property tax relief program (GPSGI)
    2. Burden shift: In Meridian, since 2010, residential values are up nearly 100% with residential total taxes paid up nearly 72%. Since 2010, commercial values re up 35-40% with commercial total taxes paid down 18%. In 2010, residential made up 57.2% of the Meridian taxes collected and commercial made up 35.8%. Now in 2020, residential made up 68.5% of the Meridian taxes collected and commercial made up 28.3%. To not address the ongoing tax shift burden as part of property tax discussions is a disservice to the communities and taxpayers as a whole

 

  1. Arbitrary revenue restrictions for the new construction formula and retiring urban renewal districts will severely underfund the necessary expansion of city services in growing communities.
    1. Cities in the Treasure Valley have seen unprecedented growth in the last decade, requiring property tax budget increases just to maintain prior service levels. As communities expand, an increasing number of personnel are required to service that community. When growth in personnel is restricted, the existing staff must provide service to more community members, resulting in service level erosion (e.g., decreased response time for police and fire emergencies). In addition to the personnel costs for the added public safety staff, there are also related capital costs – new stations and vehicles. 

 

  1. As local elected officials, we are in agreement that the solutions residents need are a restoration of the homeowner's exemption, enhancing access to the state's circuit breaker program and development impact fees. These programs will increase the amount of home value you can exempt on your tax bill, will increase access to an assistance program for Idahoans in need, and finance the building of new schools to accommodate the growing number of Idaho schoolchildren.
    1. Members of the Treasure Valley Partnership are used to creative problem solving and coming to the table with solutions. However, while local governments have been characterized as not providing solutions, that is untrue. Instead, our solutions were prevented from being discussed in the 2020 property tax interim committee and have thus far been blocked for introduction during the 2021 legislative session. 

CHECK IT OUT: These words were born in the '80s