Some Idaho prosecutors question legality of governor’s property tax relief plan

Several county prosecutors in Idaho signed a letter to Gov. Brad Little’s office questioning whether his plan to use $200 million in federal aid for property tax relief is legal under the federal CARES Act.

The letter asks Little to request a legal opinion from the U.S. Treasury Department and the Idaho attorney general’s office before proceeding further. It also asks Little move the deadline to opt-in to the program from July 17 to July 24.

Prosecuting attorneys in Latah County wrote the letter, dated Friday. It says 24 other counties agree the plan “does not appear to meet legal requirements” of the CARES Act. Of those county prosecutors, 16 agreed to be listed on the letter, including those from Twin Falls, Jerome, Gooding, Camas, Blaine and Lincoln counties.

Little’s plan calls for sending $200 million to participating cities and counties to cover local public safety personnel salaries, on the condition that savings are passed to property taxpayers as a credit on their 2021 tax bill. Cities and counties also could chose to not increase their property tax budgets by the allowed 3% next year or use any forgone balance from previous years, but they could still collect new construction or annexation.

The letter from the county prosecutors questions whether Little’s plan to distribute the money complies with the federal government’s rules.

“At a minimum, the divide between our respective interpretations of the U.S. Treasury FAQs evidences that they may not ultimately approve the program, at least in regard to the tax reduction conditions and the conclusion that the plan would constitute revenue replacement as prohibited by the FAQs.”

The letter says Little’s plan does not meet the requirement for equitable treatment between local governments, and it would “disproportionality affect rural counties with lower new construction rolls.” The money would not help local governments pay for costs related to employee health care, jails, courts, drivers licensing and other services that have increased due to COVID-19.

“While some local governments do not need the 3% increase this year, many do,” the letter says. “This further creates an inequitable situation for property taxpayers in those counties which need the increases to provide their services year after year.”

The letter also says the state’s plan “does not appear to meet the intent” of requirements for passing assistance along to individuals and placing restrictions on the money. It points to a section in the federal guidelines that says money must be “structured in such a manner as will ensure that such assistance is determined to be necessary in response to the COVID-19 public health emergency .... For example, a per capita payment to residents of a particular jurisdiction without an assessment of individual need would not be an appropriate use of payments from the Fund.”

“Recognizing that these funds should not end up as a windfall to a local entity, ... consideration should be given to only covering expenses that actually exceed budgeted amounts or that required taking funds from other lines to cover COVID personnel costs,” the letter says.

Other recipients of the letter include Idaho Association of Counties Executive Director Seth Grigg and Idaho Attorney General Lawrence Wasden.

This story was originally published July 8, 2020 at 4:10 PM.