A complicated property tax bill rankling lawmakers on both sides of the aisle has passed the House and is already in the state Senate.
The bill, which was introduced Monday, would raise the homeowner’s exemption by 25% to $125,000 – something taxpayers have been urging for years.
State lawmakers in 2016 capped the exemption at $100,000. According to an analysis from the state tax commission, the exemption would be nearly $150,000 if it had been tied to Idaho’s housing price index.
In addition to raising the homeowner’s exemption, the bill would do several other things.
That includes raising the exemption for the Circuit Breaker program for low-income seniors and veterans to $1,500 per year.
In 2022, those in the program whose homes are above 125% of the county’s median value would instead be placed into the state’s property tax deferral program. A lien would be placed on their home until the outstanding taxes could be paid.
It would also cap local and county government budget growth at 8% per year. That includes limiting incoming property tax revenues for new construction at 90% of its assessed value.
“What we’re doing here is something that we would just absolutely scream if the federal government did to us – if they came in to us and said, ‘No, you have to keep your budget at this level,’” said House Assistant Minority Leader Lauren Necochea (D-Boise).
Previously, cities and counties were limited to 3% growth in their budgets. If they chose not to budget the full 3%, they could bank those additional dollars to use in future years.
Under this bill, these taxing districts would be limited to adding just 1% growth to their budget using forgone tax dollars.
If the money would go towards an infrastructure project or long-term equipment upgrades, they could hike their budget by 3% using forgone funds. However, that increase couldn’t carry over into future years.
During a committee hearing Monday, officials from Canyon County came out against the bill.
Rep. Bruce Skaug (R-Nampa), a former Nampa city councilman, echoed their concerns on the House floor.
Skaug said first responders told him it would lead to defunding the police and fire departments, among other issues.
“This bill before us will not provide meaningful tax relief to our homeowners. Not at all,” he said. “[A] $25,000 increase when your [house and property value] has doubled over the last four years does not keep pace.”
But a number of Skaug’s fellow Republicans applauded the bill.
“This bill has just one good thing after another,” said Rep. Steven Harris (R-Meridian).
While others worried about municipalities or counties within their district, Harris said that’s not who he answers to.
“Frankly, I don’t represent my city or my county or my fire district. I represent my constituents,” Harris said.
House Majority Leader Mike Moyle (R-Star), who sponsors the bill, repeatedly said it would result in tax relief.
“Yet we’re all wrapped around the wheel because maybe it’s not our idea or my city called and had a fit. Let me give you a clue, my friends, the cities will never agree to fix anything in here,” Moyle said.
After passing the House Tuesday, the bill quickly cleared a Senate committee. It could be voted on as early as Wednesday.
