When the Legislature orders counties to carry out state functions but fails to provide the money to do so, local property taxpayers pay the price. As a result, residential property taxes are sky-high in many counties, and citizens are demanding relief.
The inability of the state to pay these costs stems from its long history of cutting state income taxes to primarily benefit the wealthy. In depriving the state of revenue to pay its bills, they’ve forced costs on to local governments and school districts and increased property taxes on all of us. Although some state politicians like to talk about their cuts coming to a billion dollars over the years, they don’t seem to acknowledge their role in increasing our property taxes.
For example, the 2018 income tax cut is costing the state at least $129 million in revenue each year. Such cuts have prevented the state from properly funding the schools and have resulted in property tax override levies that will total $214 million this year.
Income tax cuts also deprive the state of the revenue it needs to house a significant number of its prisoners. Instead, a good number are in county jails, with Ada County now having about 326 of them. The Ada County jail has become so crowded it is in violation of mandatory jail accreditation standards, with some prisoners sleeping on the floor. Although a state prisoner costs the average county $86.55 per day, a state prisoner costs some counties as much $112 per day and Ada County about $102 per day. The state only pays $55 per day for the prisoner’s first seven days and $75 per day thereafter. Consequently, Ada County is forced to subsidize the state prison system by $1.6 to $1.8 million per year, and that doesn’t even consider that the state should, but doesn’t, pay a proportionate share of the cost to build and expand the jail. One wonders if Canyon County might have been able to solve its continuing jail crowding problem many years ago if the state had simply paid the full cost of housing its prisoners.
And jails are just one of the state’s unpaid bills. The Legislature’s total unfunded county mandates are in the many millions of dollars per year. For example, county property taxpayers subsidize each sheriff issued driver’s license by $3; and counties must spend $12 million a year on indigent health care, $8 million a year on involuntary mental health commitments and $32 million a year on public defenders. The list of unfunded state mandates goes on and on.
Another reason residential property taxes are sky-rocketing is that the Legislature significantly reduced the homestead exemption in 2016, thereby shifting a significant amount of the property tax burden from business to residential property. Unfortunately, efforts to repeal this shift were blocked in the Idaho House last session.
Rather than repeal the property tax shift and require the state to pay its own bills, some inside and outside the Legislature say local governments have caused the property tax crisis by spending too much. They want to lower local government budget caps still further by barring any budget growth based on new construction. New construction is, however, a factor the law expressly allows to cover budget costs stemming from population and economic growth. That growth must pay for itself. Pretending it isn’t there, and that it doesn’t impose significant costs on local communities, won’t make it so. Arbitrarily lowering budget caps will either force cuts in public safety and other services or force overrides, which will mean no real property tax relief.
When it comes to property tax relief, the Legislature’s priorities should be to pay the state’s bills and repeal the property tax shift, not cut vital local services.