Boise homeowners could save hundreds on property taxes from state tax relief effort
The average Boise homeowner will save more than $200 on their property taxes after the city accepted federal coronavirus relief money from the state.
Gov. Brad Little offered the money to local governments in June. To participate, a city or county had to agree to a 0% property tax increase for the 2021 fiscal year — local governments are allowed to raise taxes up to 3% each year — and use the money to pay for public safety employees, specifically the salaries of police, fire and emergency medical personnel.
Boise was one of the dozens of cities that agreed to take the money in exchange for no property tax increase. Some local governments, including those of Nampa, Caldwell and Canyon County, originally said they would take the money before changing stances to reject it. Then Nampa changed its mind again and now will accept the funding.
An undated letter from Lynda Lowry, chief financial officer for the city of Boise, obtained by the Statesman in July shows that the city estimated it was eligible for nearly $65.8 million, or more than a third of the $200 million that Little made available to all Idaho cities and counties. That amount covered $32.8 million for police officers, $32.8 million for firefighters and $192,000 for emergency management staff.
The interest in the state plan exceeded the total funds available, however, according to a July release from the governor’s office. That meant participating governments got only about 44% of their total request. As a result, Boise will accept $27.9 million, the city announced in a release Wednesday.
If you own an average Boise home — which, during city budget talks in July, was estimated to be worth about $351,000 — the city estimates that you’ll save about $225 on your tax bill. In the 2020 fiscal year, the average estimated city tax bill was $1,314.
“We’re passing this property tax rebate on to our residents because they need as much relief as possible this year,” McLean said in a news release. “Just as Boiseans tightened their belts, we tightened ours by not taking the 3% allowable to cities. And we see this one-time rebate as helpful relief for our residents in this unique time.”
McLean originally proposed a 2% property tax increase, a break from the full 3% Boise has taken for years. She announced that she would adjust her budget proposal to a 0% increase the day after Little announced his relief plan.
It’s possible other tax-saving measures could come down the line. Boise’s Economic Recovery Task Force, formed in May, recommended that the city continue to “address property tax and related impacts on housing affordability.”
“Consider impacts on housing affordability as part of budget decisions regarding city’s share of property tax increases,” the report recommends. “Consider other fees as appropriate.”
It does not list any specific measures or suggestions.
The city still may collect the original 3% it passed on this year, worth about $4.8 million, at some point in the future. The Boise City Council voted in July to reserve it as “forgone tax money,” which is tax money a government declines to collect in a specific tax year. State law says the government entity is still entitled to that money and can collect it in future years as a clawback.
There are limits to that clawback, though. The resolution passed by the City Council requires that the taxes cannot be collected sooner than fiscal year 2023, or even later if the state is in a recession. It also says that the council may not collect more than one-third of all the forgone taxes, or $1.6 million, in a single year.
This story was originally published September 23, 2020 at 4:42 PM.
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