Property Tax Exemptions For Government-Owned Land Could Come To An End
A bipartisan group of Idaho lawmakers is hoping to eliminate property tax exemptions on buildings or land owned by a public entity that’s then leased to a private business or person.
Such a change would need to be made in the state constitution.
If approved, new money collected under this proposed amendment would not be able to simply pad the bank accounts of local and county governments. These funds could only be used to reduce levy rates on all properties, both residential and commercial, in these taxing districts.
“This is a first step. There’s no increase in local budgets and it’s allocated to property tax relief,” said Rep. John Gannon (D-Boise), who’s sponsoring the amendment.
Gannon said that could be as much as a 2% property tax reduction in Boise and between a 1 and 1.5% cut in Ada County. But he said it’s tough to get an accurate count because many of these properties have never been assessed by county officials.
Right now, property owned by the state, cities, counties and other governments don’t have to pay taxes on it. Thirty-five properties owned by Boise Airport have some kind of exemption, Gannon said.
One example would be land where a gas station is located directly next to and is owned by the airport. The building itself is owned by Airport Chevron Inc. and was taxed on nearly $1.2 million of assessed value last year, but the land is excluded, according to property records.
In another case, state officials bought the former Hewlett-Packard campus in west Boise in 2017 for $110 million, which Gannon said yanked about $800,000 from local property tax rolls.
Boise State University also owns commercial properties, as well as leases about 40 homes to staff, faculty and students "at affordable rates to serve the campus community," according to university spokesman Greg Hahn. The recent completion of Boise State's Honors College and Sawtooth Hall was a public-private partnership where a private company, Greystar, financed the construction. The company now leases the property from Boise State and recoups its costs by charging rent to students.
The move has backing from key House Republicans, including Majority Leader Mike Moyle (R-Star), though Gannon said he’s still searching for co-sponsors in the state Senate.
Lawmakers have made it clear that they plan to take some kind of action this legislative session to curb rising property taxes across the state.
A number of proposals have been introduced, including completely eliminating property taxes in favor of raising Idaho's sales tax to 11%, limiting how local governments can tax new construction and putting a temporary freeze on any kind of property tax increase for one year, which was scheduled for a public hearing Tuesday morning in the House Revenue and Taxation Committee.
As a constitutional amendment, two-thirds of both legislative chambers would need to approve it before going before voters in November’s general election. It would then only need a simple majority at the ballot box to become law.
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