The city of Challis was the lone governmental entity in Custer County to apply for the state’s coronavirus-inspired tax relief program.
Last month, state officials detailed how the remaining money from the Coronavirus Aid, Relief and Economic Security Act they received from the federal government would be spent. The federal government gave Idaho $1.25 billion, and so far the state has spent about $800 million.
Some $200 million is earmarked for the tax relief program to government entities. So far, 54 cities and 28 counties are participating. Challis Mayor Mike Barrett said because Challis fit all the criteria and it would be illogical to turn down a chance to lower property taxes, the city applied.
“We thought it made sense,” Barrett said. “At least for a one-time thing.”
The relief program is designed to help pay wages for public safety workers during the COVID-19 pandemic as long as property taxpayers get a credit on their 2021 tax bill. Taking the money also means a city or county can’t implement the 3 percent property tax increase that’s allowed by law next year.
Custer County Commission Chairman Steve Smith said the county won’t participate in the tax relief program. After reviewing the document that authorizes the program and after speaking with other county commissioners, “there were too many red flags,” Smith said.
State officials told Smith the money would be used to by local governments to fund firefighters, police officers and other public safety personnel, but the commissioner said the language in the document doesn’t support that. Several county prosecutors across Idaho voiced concerns about that, Smith said. If the document isn’t airtight, he said, recipients might be responsible for paying it back.
“It wouldn’t be the first time somebody in government screwed up,” Smith said.
Also, Smith made the point property taxes are so low in Custer County, it wouldn’t make sense to opt out of the 3 percent increase.
Custer County currently has the lowest property taxes in the state, which is one of the reasons Mayor Wayne Oleson of Mackay also didn’t sign up for the tax relief program.
Oleson said since the city contracts for police protection with the Custer County Sheriff’s Office and doesn’t have its own fire department, it would have been “ridiculous” for them to give up the 3 percent increase.
Also, Like Smith, Oleson expressed concerns about the legality of the program. “It’s too wishy-washy,” he said, “and there’s nothing cast in stone.”
Stanley Mayor Steve Botti said the city took some state money to pay for unforeseen expenses due to COVID-19, but the city government chose not to participate in the tax relief program. Stanley only has about 60 residents, the mayor pointed out, so cutting what little money the city receives in property taxes didn’t make much sense.
Similar to Smith and Oleson, Botti also chose to listen to opinions from dissenting prosecutors.
“There’s a lot of question marks,” Botti said, particularly with how the money will be spent. Stanley, like Mackay and Challis, has a contract with the Sheriff’s Office for law enforcement, and Botti said he didn’t want to tie something legally murky to his town that it doesn’t need.
Barrett countered that because state officials know some small towns contract with county sheriff’s offices for public safety, they built in a provision that allows cities within counties that declined the tax relief to use some of the money without spending it on wages for public safety.
Since the Sheriff’s Office contract with the city of Challis is for $60,000, Barrett said, the state will supply half that amount to Challis property owners through a proportional reduction in the city’s levy rate.