Cities, counties want federal aid Little doles out for tax relief but worry: Is it legal?
Update, Monday, July 20: Ada County and the Treasure Valley cities of Eagle and Star have signed up for a share of the relief money since this story was written. The list of participating local governments in the story has been updated to include the full list released Monday by Gov. Brad Little.
Congress has handed Gov. Brad Little $1.25 billion for coronavirus relief, and he wants to use $200 million of it for a one-time, 10% to 20% cut in city and county property taxes on December’s tax bills.
City and county officials are eager for the money, but some local officials question whether Little is correct when he asserts that he has legal authority to spend it on general property-tax relief. They don’t want to accept the money only to have federal officials pull it away by ruling that he didn’t.
Nonetheless, Little said Wednesday that 25 Idaho cities and 10 counties have taken up his tax-relief offer so far, including the Treasure Valleys’ Big 4 cities: Boise, Meridian, Nampa and Caldwell. Canyon County has, too.
Officials of other Treasure Valley governments, including Ada County, Garden City and Middleton, say they plan to accept the offer by this Friday, the deadline Little imposed.
“This allows us to provide property tax relief to residents during tough economic times while ensuring that the city is able to provide front-line safety services,” Boise Mayor Lauren McLean told the Statesman through a spokesperson.
In concert with his Coronavirus Financial Advisory Committee, Little decided that local governments must use the money for public safety — specifically, for the salaries of police, fire, and emergency medical services personnel — and to apply the local money that would have been spent on those services to property-tax relief.
“Our focus is to support our communities and our police, fire, and EMS personnel and ensure there are no reductions in public safety during these unprecedented challenges,” Little said in in a news release Wednesday. “I appreciate the cities and counties working with us to ensure the resulting budget savings are given back to the people of Idaho in the form of property tax relief rather than backfilling local-government budgets.”
The tax relief will appear as a credit on property owners’ December tax bills, said Garden City Mayor John Evans, who is on the advisory committee.
Local participation is voluntary.
There are additional conditions. This is a big one: Local governments must agree not to raise their budgets in the fiscal year that begins Oct. 1, although cities are still allowed to collect taxes on new development as it joins the tax rolls.
That means local officials must forego the annual increases state law allows of up to 3% per year — money many local officials say they need, and that Boise has claimed for many years.
Elizabeth Duncan, spokesperson for the Ada County commissioners, said in an email that Ada County also intends to submit a letter of intent by Friday’s deadline but will condition its participation. The county wants confirmation from the U.S. Treasury Department that Little’s program meets the requirements of the $2.2 trillion coronavirus relief law Congress passed in March that includes the money Little is offering.
County prosecutors from more than half of Idaho counties signed a letter last week asking the governor’s office to get a legal opinion on Little’s plan, the Times-News in Twin Falls reported.
They’re concerned that putting conditions on the relief money, including its requirement that municipalities not raise their budgets, might not comply with federal rules.
The state’s plan “does not appear to meet the intent” of federal requirements, the letter said. It said federal guidelines say any assistance program using the federal 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.”
Marissa Morrison, Little’s press secretary, said federal guidelines confirm “the governor’s authority to put conditions on the use of the funds.”
Boise’s McLean has decided to propose no tax increase this year, making the city eligible for the program.
Nampa Mayor Debbie Kling said Nampa, too, has decided not to raises taxes next year given “the current economic climate.”
“Having met all of the requirements set forth by the governor’s office, we wanted to participate in any opportunity to pass along tax relief to our citizens, should funding be approved via the state of Idaho and the CARES Act,” Kling said through a spokesperson.
Garden City’s Evans told the Statesman in a phone interview that his city wants to take advantage of the program but will ultimately decide when officials learn how much they would receive.
Governments that submit letters of intent are not locked into the program until they report their property tax appropriations to the Idaho State Tax Commission, Evans said. That means they can opt out before completing their budgets.
“When we find out how much we can utilize, we will evaluate the benefit to our taxpayers,” he said. “That will drive the final decision.”
Some cities are opting not to take the money because it is not clear they can.
Eagle contracts with the Ada County Sheriff’s Office for police services, so city officials are uncertain whether they would apply for the relief or whether Ada County would.
“We are still trying to figure out who would be the entity that would need to apply,” city spokesperson Ellen Matilla said by phone.
Kuna Mayor Joe Stear told the Statesman that his city did not qualify, because it also contracts with the Ada County Sheriff’s Office, and because it does not have a fire department.
“Good news is that the budget that was presented to council did not include a 3% increase, so the savings will be the same for property taxpayers,” Stear wrote in an email.
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The cities and counties that have submitted their letters of intent as of Wednesday afternoon, according to Little’s office:
American Falls
Ammon
Arimo
Ashton
Bellevue
Blackfoot
Boise
Bonners Ferry
Buhl
Burley
Caldwell
Challis
Chubbuck
Coeur d’Alene
Eagle
Filer
Garden City
Grangeville
Hailey
Homedale
Horseshoe Bend
Idaho City
Idaho Falls
Inkom
Jerome
Kellogg
Kimberly
Lewiston
McCall
Meridian
Middleton
Moscow
Nampa
Orofino
Osburn
Parma
Payette
Pinehurst
Pocatello
Post Falls
Preston
Rathdrum
Rexburg
Rigby
Salmon
Sandpoint
Shoshone
Soda Springs
Spirit Lake
St. Anthony
Star
Sun Valley
Twin Falls
Weiser
Adams County
Ada County
Bannock County
Bingham County
Blaine County
Boise County
Bonner County
Bonneville County
Boundary County
Butte County
Camas County
Canyon County
Clearwater County
Elmore County
Fremont County
Gem County
Gooding County
Idaho County
Jefferson County
Jerome County
Kootenai County
Latah County
Lincoln County
Madison County
Owyhee County
Payette County
Power County
Twin Falls County
Where Little is spending that $1.25 billion
The spending for Idaho under Congress’ emergency coronavirus relief bill that Gov. Brad Little has approved so far includes:
▪ $300 million for grants for small businesses
▪ $200 million for local-government property-tax relief
▪ $58 million for state agencies for virus-related costs
▪ $50 million for broadband infrastructure to support distance education, remote work and telehealth
▪ $44 million for counties’ virus-related costs
▪ $42 million for cities’ virus-related costs
▪ $34 million for a postsecondary digital campus and for mini-grants to schools to close the digital divide
▪ $16 million for the Department of Correction
▪ $6 million for marketing Little’s Idaho Rebounds plan
▪ $5 million for rental and utility assistance
▪ $2 million to improve the state’s firewalls
▪ $2 million for PPE for small businesses
▪ $1 million to the Workforce Development Council
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Business Editor David Staats and the Times-News in Twin Falls contributed.
This story was originally published July 15, 2020 at 8:07 PM.
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