An Idaho senator says this bill would cut property taxes. What does it really do?
Local elected and public safety officials in the Treasure Valley on Thursday decried a bill that an Idaho state senator insists would cut property taxes. They say it won’t grant taxpayers the promised relief — but it would jeopardize essential city services.
Idaho Sen. Jim Rice, R-Caldwell, who sponsored the bill, said he aims to stop rising property taxes by limiting the levy rate for new construction, which he claims is the main reason behind property tax growth. It would place new limitations on the property tax budgets of local taxing districts — such as cities and counties.
In a press conference Thursday, city and county elected officials and public safety officials from the Treasure Valley urged legislators to scrap Senate Bill 1108 and consider other changes. They said they support lifting the freeze on the homeowner’s exemption and increasing property tax reductions offered through the state’s circuit breaker program — two options Democrats have tried to push through this session, without success.
Nampa Mayor Debbie Kling urged legislators to “stop pointing fingers” and come together with cities to find sustainable solutions.
A ‘crippling effect’ on public safety
Rice’s bill would allow local taxing districts to only recognize half of new construction and three-fourths of annexation in their property tax budgets. Currently, taxing districts recognize all new construction and annexation. Essentially, that limits local jurisdictions from budgeting for their own growth, local elected officials said.
Local officials throughout the Treasure Valley said they wouldn’t be able to provide services — namely, public safety services — to meet the increasing number of people. Police budgets make up the majority of city budgets.
Star Mayor Trevor Chadwick said he hopes legislators reject Rice’s bill “so we can actually work on some true solutions” on property taxes. Kuna Mayor Joe Stear said the bill would force city officials to “carefully consider what growth can occur” and limit the type of growth that puts any strain on city services.
Nampa Fire Chief Kirk Carpenter said the original bill would have led to a 60% reduction in the fire department’s budget and a potential shutdown of firehouses. The bill has since been amended to fix that — but Carpenter on Thursday said the bill still restricts departments from growing their budgets to meet the city’s growth in the future. He said inserted amendments in the middle of a vote shows it needs more thought.
Rick Allen, Garden City police chief and Idaho Chiefs of Police Association president, said Thursday the bill would have “a crippling effect” on cities’ ability to provide public safety.
Rice couldn’t be reached for comment Thursday.
Spikes in assessed property values in Idaho
State legislators have often blamed cities for tax increases, claiming they overspent their means. Rice has insisted much of the property tax increases come from the levy rate on the construction rolls.
But local officials say that’s not true — spikes in assessed property values make up the vast majority of the tax increases. Kling said she supports limiting the levy rate, but that it would be “minimal” in providing tax relief.
In Star, for example, a residential property worth $151,700 in 2015 was valued at $250,800 in 2020. That’s more than a 65% increase. Local officials provided several examples in which residential properties showed massive increases in property valuations year over year. A shift in the property tax burden onto homeowners over recent years has left a disparity, according to local officials.
Local officials also said legislators contributed to the property tax spikes because they froze a property tax exemption for homeowners in 2016. That, on top of inflated assessed property values, has resulted in homeowners struggling to pay their taxes.
During Thursday’s press conference, several local elected officials blasted the proposed bill and said it fails to deliver on the promise of tax relief, while tying local governments’ hands on ways they pay for growth.
Commercial properties now only account for a fraction of property taxes collected. Sen. Ali Rabe, D-Boise, in committee last week said she was still unclear how Rice’s bill would fix that problem or address property valuations.
Rabe said she’s worried it could discourage building permits and growth and exacerbate a housing crisis.
Local elected officials said Thursday legislators don’t seem to understand how local governments set their budgets and need to listen to them. Canyon County Commissioner Pam White said they all need to establish trust with each other.
“The same constituents that elected our legislators are the same constituents that elected us,” White said. “We need to trust them, and they need to trust us.”
This story was originally published February 26, 2021 at 4:00 AM.
