Boise homeowners could get even more property tax relief than Idaho promised. Here’s why
Homeowners in Boise can expect to see another round of tax relief this year after Idaho legislators passed a law that provided property tax reductions in the coming years.
On top of the guaranteed tax credits provided by the state law, Idaho will be sending unspent money back to property owners this year because of a surplus in the state’s budget. Last year’s law estimated $122.5 million in property tax relief this fiscal year and directed the state to allocate additional surplus money to more tax reductions.
Gov. Brad Little boasted about the savings in a news release and called the state’s “conservative approach” encouraging for “economic prosperity.”
The state law aimed to reduce the taxes landowners pay by redirecting sales tax revenue toward schools, freeing up money that historically has been used for education needs. This year, the state set aside $110 million for that purpose, with part of it going to a schools fund and another part to a tax relief fund, according to the Governor’s Office. The idea is that both funds reduce taxes for property owners.
The law also takes unexpected surpluses and sends them back to residents. When the state spends less than it predicted it would, it uses the leftover money — up to $150 million of it — as property tax relief. That happened this year.
“What Idaho is doing is working,” Little said in his news release. “Our conservative approach to governing means we encourage economic prosperity, we rein in government spending, and we manage our budget with money to spare.”
The state had a $52.5 million surplus in the last fiscal year, which ended June 30, according to the Governor’s Office. Officials also added another $24 million in unspent funds that were appropriated to agencies.
Most of the $76.5 million will be directed to a property tax relief account, while the rest will go to the school relief fund, spokesperson Madison Hardy told the Idaho Statesman by email.
But how much should homeowners expect to get off their bills from the surplus?
It may be hard to see.
Counties and cities in Idaho set budgets each year, which are part of the equation that determines an individual’s property taxes. Growing communities may ask for more in taxes to pay for new infrastructure, services, public transit, firefighters or other services. By law, local governments are allowed to increase their annual property tax budgets by 3% every year, or more if they haven’t raised property taxes that much in years past.
Relief dollars from the state, while potentially lessening how much counties need to ask for from their residents, could have a limited impact on tax bills. Neither the Governor’s Office nor the Ada County Assessor’s Office had an estimate on what the additional property tax reductions would look like.
“It is difficult for us to predict how homeowners will see these savings because it is also based on county budgets,” Hardy said. “If counties increase their budgets, less relief through these state investments will be realized.”
