Boise mayor proposes no tax increase for first time in years. Your taxes may rise anyway
Boise Mayor Lauren McLean’s proposed city budget for the 2021 fiscal year is built without the property-tax increase the city has claimed each year in recent memory.
But your taxes may still go up.
In part, that’s due to rising assessments — the average assessed residential property value in Boise rose from $330,200 to $351,023 from last year to this. But there’s more to it.
Across Ada County, the tax burden has increasingly shifted from commercial properties to residential properties. In 2019, residential property owners in Ada County paid 72% of the total property tax in the county, compared with 28% paid by commercial property owners. That was up from residential property owners paying 69% in 2018. As more of the overall tax burden shifts to houses, their owners’ tax rates can go up even if local governments spend less.
Plus, the homeowner’s exemption isn’t what it used to be. State law allows homeowners to exempt $100,000 of their primary residence’s assessed value from taxes. That exemption was at one point tied to the housing price index but was capped at $100,000 in 2016, meaning it is worth less each year as Treasure Valley housing values soar.
So if you own that hypothetical $351,023 house with its nearly $21,000 value increase from last year, the city’s share of your taxes would go up about $38 instead of about $78, according to city estimates. Your December city tax bill would rise from $1,311.80 to $1,349.62, or 2.9%.
And if your home’s value rose at a faster-than-average rate, your taxes could go up even more, because, as Eric Bilimoria, budget manager for the city of Boise, told the Statesman last year, you will be paying a bigger proportion of “the total pie that represents taxes paid.”
McLean is proposing to break with City Hall’s longstanding practice of taking the maximum 3% yearly property-tax increase allowed by state law without voter approval. That will leave $4.8 million in taxpayers’ pockets.
The proposed total for the 2021 budget is $730.5 million, down from $764.7 million in 2020, with most of the difference coming from the city’s contingent appropriation, which is used to allocate money for projects that carry over from one fiscal year to the next. The biggest reason the contingent appropriation shrank is that the city no longer needs to account for a proposed new main library, since it remains on hold.
Property taxes — estimated to bring in $162.1 million in fiscal 2021 — are the city’s largest source of revenue. More than two-thirds of the city’s general fund revenue comes from property taxes.
Boise could be eligible for money from the state intended to bring down taxes, but it is not clear if the city will do that or what relief it may offer individual taxpayers.
Gov. Brad Little announced last month that the state is offering up to $200 million in funds from the federal coronavirus-relief law to go toward salaries of emergency-services personnel. The goal, Little said, would be to give that money “back to the people of Idaho in the form of property tax relief.”
The deadline for the city to decide is July 17, and Karen Boe, spokesperson for McLean, said Wednesday that the city is “still evaluating the implications.”
What’s going into your tax bill?
The largest part of your taxes — 50.5% — goes toward public safety, split between the police department (which gets 28.8 cents for every dollar you pay) and the fire department (21.7 cents).
The next largest department is Parks and Recreation, which gets 12.1 cents. Capital and debt transfers gets 6.8 cents, while the library gets 5.7 cents.
From there, the pieces of the pie get smaller. Contractual services (which include Valley Regional Transit) get 4.9 cents, public works gets gets 3.3, and the planning and development department gets 1.8. The mayor’s office, community engagement, innovation and performance, internal audits, the City Council and the office of police oversight each get less than a penny.
This year’s budget proposals represent a shift in priorities from the previous administration. The reduced budget still accounts for raises for employees (although smaller than in past years), but it makes small cuts in several areas.
McLean proposes to reduce the the Police Department’s fleet, eliminating several unmarked civilian vehicles, to save $40,000. Consolidation of duties in the Fire Department would save $174,000. The city would reduce custodial services at City Hall, eliminate fax lines and bring city event planning in-house.
The city will still be hiring for several positions, including six roles in the information technology department, five new police officers and an energy program manager to handle the city’s energy and climate goals. That would give the city the equivalent of 1,835.31 full-time employees, up 19.23 from last year’s budget.
What can I expect next year?
Across the city, revenues from several areas are projected to fall. Development fees, which hit an all-time high as a revenue source for the city last fiscal year, are expected to drop 13.6%; sales tax is expected to fall 10.5%. Those are largely attributed to the recession caused by the outbreak of COVID-19 and shutdown of the economy.
While that leads to a smaller budget, it won’t affect most services Boiseans use. In the 2021 fiscal year, you should be able to expect to see progress on new parks, including Spaulding Ranch at 3805 N. Cole Road, and a new downtown police station.
You also may notice more services go online. The elimination of faxes won’t affect many people, but city officials have discussed in previous meetings and on Tuesday finding a way to keep services that were once in person offered online even after COVID-19 is no longer a concern, including remote connectivity and public testimony during public meetings.
You should also expect that despite national conversation on policing, Boise’s department will look almost the same in size. McLean, as well as Ryan Lee, the city’s new police chief, have both said they do not support efforts to defund the police.
McLean and several council members acknowledged that policing can be harder on communities of color and that as a result some activists were calling for a shift in priorities toward other things. McLean maintained that the city is able to focus on both rather than one or the other.
Clegg pointed to a desire for the department to “find creative solutions that promise a better outcome over time” in policing.
“For me this budget is a starting point for beginnings of experimentation,” she said. “And I believe it will be a process that takes some time, but make sure that those change does become how we do business, and does become part of the system going forward. I just wanted for the public, let them I’m know absolutely committed to this change but absolutely committed to doing it right.”
The public hearing on the fiscal year 2021 budget is scheduled for 6 p.m. on Tuesday, July 21. Remote testimony options will be available, though details have not yet been publicized. Feedback can also be shared through an online portal.
This story was originally published July 2, 2020 at 4:00 AM.
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