BOISE — The Idaho Legislature’s Property Tax Working Group wrapped up its first meeting Monday after hours of presentations, as its minority Democratic members distributed four proposed property tax relief bills to the committee.
However, Rep. Gary Collins, R-Nampa, the panel’s co-chair, said it was too early to consider any legislation.
“We are a long ways from that point,” he said.
Sen. Grant Burgoyne, D-Boise, said, “I did distribute some possible proposed legislation from me and Rep. (Mat) Erpelding today. It may be early. But for me, the legislative session feels like it’ll start on next Monday. So I think … I’d certainly appreciate receiving anyone’s ideas on that.”
The joint committee of senators and representatives heard from the state Tax Commission, representatives of Idaho’s cities and counties, legislative staff, and the Idaho Farm Bureau, which commissioned a study showing that homeowners get more benefits than they pay for with property taxes, while farms get back less than what they pay in, in the form of services. Homeowners also are the group paying the single largest share of Idaho’s property taxes, according to Tax Commission figures.
Burgoyne and Erpelding’s proposed bills include:
— A substantial increase in the “circuit breaker” property tax break for low-income Idaho homeowners who are over age 65 or disabled.
— Creating a new refundable income tax credit of up to $500 a year for property taxes paid by a homeowner.
— Creating a new refundable renter’s credit of $350.
— Bringing back the indexing of the homeowner’s exemption to home value changes that lawmakers repealed in 2016.
In 2016, lawmakers capped the exemption at $100,000, even as Idaho’s home values were skyrocketing.
Collins, who is chairman of the House Revenue & Taxation Committee, said he’s hearing concerns from his constituents about rising property taxes to the point that he fears a property tax revolt akin to California’s 1978 Proposition 13.
“I’ve been in the same home for 33 years, and I’ve seen what’s happened in that case,” Collins said. “I’ve always wanted to own my home, but I don’t own my home, I really don’t. I’ve had it paid (off) for a long time, but each year, if I don’t pay that property tax, I don’t have a home.”
Garden City Mayor John Evans, speaking on behalf of the Association of Idaho Cities, said, “The calls I get, and I can pretty much assure you every mayor gets, is, ‘I want to see the police in my neighborhood more,’ ‘I want the Greenbelt fixed,’ I want, I want, I want. And there’s not a good understanding of why we aren’t maybe servicing it at a level that maybe some individuals would want to see. The point is: We’re service providers.”
Evans said the main services his city provides are law enforcement, library and parks.
“I guess you can define basic any way you want to, but these are pretty fundamental services that our citizens expect to receive in exchange for their tax dollars,” he said.
Asked what would happen if the state Legislature cut city revenues, including the 15 percent that now come from state revenue sharing and the 55 percent that come from property taxes, Evans said, “The cities will reduce services. It’s really not very complicated for the overwhelming majority of our cities, it really isn’t. If we can’t keep up with the cost of doing business, then we do less business.”
Kathlynn Ireland, tax policy specialist for the state Tax Commission, shared statistics on how Idaho property taxes compare — they’re 38th highest in the nation, lower than Montana, Oregon, Utah, Washington and Wyoming, but slightly higher than Nevada.
House Majority Leader Mike Moyle, R-Star, challenged that.
“When we think about property taxes, some parts of the state don’t have a problem right now, and others do,” he said, adding that he thought it was a “disservice” to look at statewide averages.
The Tax Commission also compared taxes for a family of three living in Boise to the U.S. average for 51 cities, each the largest in its state. The figures were calculated for family income levels of $50,000, $75,000, and $100,000 in 2017.
For the family of three in Boise with a $50,000 annual household income, income taxes paid were 1 percent higher than the national average; sales taxes, 4 percent higher; and property tax, 34 percent lower.
For the family of three in Boise with $75,000 annual household income, income taxes were 3 percent lower than the national average; sales taxes 7 percent lower; and property taxes 26 percent lower.
For the family of three in Boise with $100,000 annual household income, income taxes were 9 percent higher than the national average; sales taxes, 7 percent lower; and property taxes, 14 percent lower.
Idaho’s per-capita property taxes rank 42nd in the nation, Ireland reported.
Representatives of Idaho’s counties and cities noted that there are big differences across Idaho communities, from sparsely populated rural counties to bustling, fast-growing cities.
Evans asked lawmakers to beware of “the law of unintended consequences” when changing state tax laws.
Sen. Kelly Anthon, R-Burley, the panel’s Senate co-chairman, said, “I think what today demonstrates is the complexity of the issues that we face,” including those wide disparities. “I think what we’ve done is at least set the table to take the next step in understanding what’s best for Idaho.”
The working group set its next meeting for Nov. 18.