Boise mayor may seek smaller property tax increase as coronavirus crunches revenue
Boise is looking at taking a smaller tax increase this year than it has in years, providing what Mayor Lauren McLean hopes will be some relief for property owners.
McLean asked the city’s finance department to model the 2021 budget on a 2% tax increase plus new construction and annexation. State law allows cities to take as much as a 3% increase without requiring voter approval, and Boise usually claims the full 3%.
Eric Bilimoria, Boise’s budget manager, said during a Boise City Council work session Tuesday that if the city takes the full 3%, the average Boise homeowner would pay about $40 more in property taxes to the city for the fiscal year beginning Oct. 1. If the city were to take only 2%, that would drop down to just under $27. In the 2020 fiscal year, the average city tax bill estimated at $1,314.
Even before the spread of COVID-19 closed businesses and sent the economy downward, “there were so many people in our community that were calling on us to look at how we make cuts if possible, how we help impact housing affordability,” McLean told the council. “Now, even more so, we’re hearing that.”
If the city took less than 3% next year, it could potentially “claw back” that money in future years in the form of forgone taxes.
The suggestion to take a smaller increase comes at the same time the city is looking at losing revenue from several areas. The city originally estimated about $257 million in revenue this year, a number Bilimoria said is now closer to $242.6 million in revenue, representing about a 5.6% decrease.
That number may change as the pandemic plays out, he said. Revenues are down almost across the board, from liquor taxes, which are generally considered somewhat immune to recessions, to development fees, which were otherwise off to a strong start early this year.
McLean, when she took office in January, asked departmental officials to look at where the budget could be trimmed. She told the Statesman in an interview Tuesday that the trimming had helped the city thus far to avoid cutting jobs.
Members of the council didn’t say much about a lower increase, but some instead asked questions on what money might be used for if the city opted to take the full 3%.
Council Member Jimmy Hallyburton said that he appreciated the idea of asking for 2% but asked if other cities had any examples of using the additional 1% to “invest in services that would serve our most vulnerable community members.” Council Member Lisa Sánchez said she appreciated the possibility of using the money to support “new Boiseans.”
The city’s budget with McLean’s proposals is set to be released on June 12. The public hearing on the budget is scheduled at 6 p.m. on July 21 at Boise City Hall. The budget will likely be adopted in August, with its taxes appearing on property owners’ December bills.
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