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Growing Pains: Seeking Property Tax Relief In The Treasure Valley

Homes going up off Franklin Road in west Meridian in April 2018.

When it comes to giving property tax relief to low-income or fixed income residents in the Treasure Valley, there's no easy solution. But according to Idaho Matters guests Margaret Carmel of BoiseDev and state Sen. Maryanne Jordan (D-Boise), there are several ideas worth considering. As part of our three-part conversation on this issue, we're exploring a few of these possible solutions today.

This interview is part of our new series called "Growing Pains." Over the next week or so, we'll explore stories and issues surrounding the Treasure Valley's rapid growth and increasing unafforability. Subscribe to our podcast to hear every interview, and download the Boise State Public Radio app to send us a voice message using our Talk To Us feature.

Support for "Growing Pains" comes from Broadcast Society members Jennifer Dickey and Andy Huang.  Member support is what makes these interviews possible. Support this coverage here.


Read the full transcript here:

GEMMA GAUDETTE: You're listening to Idaho Matters, I'm Gemma Gaudette. We're continuing our series Growing Pains, and today we've been focusing on property taxes. So now we're going to look at a few proposed solutions to lower those taxes for homeowners. Back with us, our BoiseDev.com reporter Margaret Carmel and Senator Maryanne Jordan, a Democrat from Boise.

Margaret, back in February, you wrote that Speaker of the House Scott Bedke said on the first day of the legislative session that the rising property tax burden is a major issue he and other party leaders would like to tackle this year, as in 2020 in January. How much progress did they make?

MARGARET CARMEL: Zero. None. At the beginning of the session, there were some discussions about how the problem would be addressed. House Majority Leader Mike Moyle, he proposed two bills. One would prevent local governments from raising taxes when they have new construction, and the other bill would have frozen tax increases across the state for a year. And his idea with that bill was that if it basically blocked local governments from increasing taxes, they would be willing to come to the table, in his words, and kind of negotiate for some reform.

And what you heard in those hearings was-- the new construction bill was never introduced. It never got passed, him kind of floating the idea. But that property tax bill went pretty far. And what you heard in those hearings was local government leaders, specifically from small places in Idaho saying, look, if I can't take this 3%, I have no idea how I'm going to complete ADA requirements at my courthouse or I'm going to complete necessary infrastructure projects. The general sense was these local government leaders saying, 'we have no choice but to raise taxes, to get done what we need to get done' and the Republicans specifically, Mike Moyle, we're not really pleased with that answer. He kept evoking older homeowners who, they're on fixed incomes, their expenses are going up, but they can't choose to increase the amount of Social Security benefits that they're getting.

And so the argument there was, well, if you know, the people of Idaho are cutting their budgets, then then so should the local governments of Idaho. None of the Democratic proposals ever heard at a hearing, and those included increasing the circuit breaker, you know, indexing the homeowner's exemption and other solutions like increasing funding for schools and other sorts of things, which I'm sure Marianne would would like to talk about. And then COVID hit and the session ended, and we're right where we started.

GAUDETTE: Right. I do want to get to Senator Jordan about her thoughts on that. But first, we did talk with Ada County assessor Bob McQuade on what he would like to do to lower property taxes. So let's take a listen to that.

BOB MCQUADE RECORDING: I don't think we really need to do a lot of real dramatic changes to the system. To me, my preference would be indexing the homeowner's exemption, there's going to be some relief for residential property owners. That, of course, is going to put shift over to commercial. They'll be paying a little bit more. And then increasing the benefits for the property tax relief program.

GAUDETTE: Ok, so let's talk about that exemption. As you said, Senator Jordan, lawmakers capped that in 2016, but you actually got together with Republican Representative John Vander Woude and you two came up with a bipartisan bill to remove the cap. So what happened?

SENATOR MARYANNE JORDAN (D-BOISE): You know, we did that a couple of years ago and it never even got a hearing, tried it again last year. Margaret did a great job of articulating the lack of activity on these issues in the last session.

There was a lot of pressure brought to bear from a couple of areas when that cap went into existence, it shifted the burden of the total property tax impact disproportionately onto residential properties and away from commercial properties. That used to fluctuate somewhere around 55% residential, 45% commercial. And it's now nearly 70, 30, at least in Ada County.

Credit Alan Dornfest / Idaho Tax Commission
Idaho Tax Commission

And so the realtors commercial property and so on were, you know, instrumental in kind of pushing back against that reindex. And then you have the constant rhetoric in the legislature about all taxes being bad. And, you know, none of us like to pay taxes. It is never a thing where we sit down and say, 'woohoo, I get to write this check.' But taxes pay for services that people demand. And there's 200 cities in the state of Idaho. So for the legislature to be just randomly saying cities need to cut their budgets, while they are not, as I mentioned before, getting their own house in order. That's making this whole quest for a solution incredibly difficult.

GAUDETTE: So, Senator, would lifting these exemptions or extending the amount of a circuit breaker really help? Or should the state look at something a bit more drastic? I mean, similar to maybe something that the state of Florida has done with their Homestead Act, which basically is, you're grandfathered in if you are of a certain age. Right. Like if you bought your home a certain number of decades ago, and you are above the age of, I believe, 65, you get basically grandfathered into a property tax and that does not go up. Because there are people who are literally being priced out of their homes because they cannot pay their property taxes.

JORDAN: Well, they are. And I think that the circuit breaker and improving that situation, updating those numbers would go a long way to help those people. I kind of hesitate on those blanket applications because you can have people who, you know, 20 or 30 years ago bought a million dollar home and have been very fortunate to have tremendously high incomes and to completely exempt them from from property taxes and the services that that they deliver seems a little disproportionate.

There's not going to be any one thing that is going to solve this problem. And I think that's where we get stuck. Everybody keeps trying to find the one solution. It's going to be a combination of efforts that will help to stabilize the property tax situation and the impact on property tax payers. I think, as I said before, the legislature improving its funding of education. The legislature exempts sales tax on literally billions of dollars of income every year. And those things are never reviewed or revisited. And we've got to be taking a look at those things as well, because if that could help schools, then that could reduce the burden on property taxpayers. So it's a really complicated thing that no one bill is going to fix. But if we're not having hearings on all these things and trying to at least start somewhere, it's a tough haul.

GAUDETTE: And you're not running for reelection this year, Senator. So what honestly, what are the chances that your proposal to lift the cap on the homeowner's exemption will even come back to the legislature in January?

JORDAN: Well, I think that this discussion will continue. I know that we have some very committed members who want to carry this forward, specifically, Senator Grant Burgoyne, who is serving on the interim committee on property taxes. And so I'm confident that this is not going to get dropped. I don't think this conversation rises and falls on one person.

And I think that as as the years go by and the discussion gets more robust, that there will be more pressure to do something about these things. And hopefully they'll make a little bit of progress.

GAUDETTE: And Margaret, have you heard of anything that might come up in next year's Idaho legislature to ease some of this property tax burden off of homeowners?

CARMEL: I haven't heard of anything yet, the state has an interim committee that's discussing property taxes, but all the stories that I've read out there, I haven't seen kind of a solution or something that points to a bill coming back. My guess is that we're probably going to see the debate fall on the same lines where Republicans are looking to the solution to basically just curb spending at the local government level, whereas Democrats might be looking to either change the structure of the taxes, find revenue in different areas or, you know, increase funding for low income folks.

I think that there's a real philosophical difference here on the problem that stems from property taxes and also even just looking at property taxes in general. I think that there are folks on the right that believe-- that do not agree with the concept of property taxes at all because it's their property and they should not be paying government to possess it. Whereas you listen to what Senator Jordan just said and, you know, she was talking about, well, no one likes paying taxes, but they pay for services that we need. And so it is really hard to bridge the gap between those two viewpoints of the world.

GAUDETTE: Yeah, well, I'll tell you this. You talk about it being complicated. We have literally spent the last hour talking about property taxes, and I feel like we haven't even scratched the surface. I mean, this is how complicated this issue is. I appreciate both of you spending this hour with us. Margaret, as always, excellent reporting. Senator Jordan, thank you for everything that you've done, being a leader in the state House. You'll definitely be missed next session.

JORDAN: Oh, thank you, Gemma. I appreciate that.

GAUDETTE: And, you know, these are not the only possible solutions to keeping homeowner property taxes down. We will have more ideas, including a really unique idea that hasn't even been tried in the United States yet. That's all going to come up next Tuesday on Idaho Matters. That's when we're going to wrap it all up. We're going to have a roundtable with some experts on growth and affordability. And we're going to dig into some other ideas and who knows, maybe there are some options out there. But I think, as Senator Jordan said, it is not a one size fits all.

We've been talking to BoiseDev.com Reporter Margaret Carmel and Idaho Senator Maryanne Jordan, a Democrat from Boise. As always, thank you both so much for your time today.

BOTH: Thank you.

GAUDETTE: And I want to say a huge thank you to our producer, Samantha Wright, Samantha produced today's entire program on property taxes. I tell you, I bet she felt like she went back to an economics class in college after doing this. And we have to give a shout out to reporter Betsy Russell from the Idaho Press, who has done a lot of the original reporting on the growing problem of property taxes. We will continue our new series called Growing Pains on Thursday.

Support for Growing Pains comes from Boise State Public Radio Broadcast Society members Jennifer Dickey and Andy Huang.

Samantha Wright is a news reporter and producer for Idaho Matters.