90-year-old widow just wants to stay in her home. A property tax freeze won’t help her
When Arvilla Harris and her husband bought their house in southeast Boise in 1967, it cost about $14,000, she recalled. Her 30-year mortgage payments were $75.85 per month.
That was then.
This is now: Her single-story, three-bedroom, one-bathroom, 1,320-square-foot house has nearly doubled in assessed valuation over the past eight years, from $124,000 in 2012 to $245,900 in 2019.
Her taxes have gone from $1,053.20 in 2009 to $1,985.68 in 2019.
“Way back, (the property tax) was reasonable, but each year, it’s just been going up,” Harris told me in an interview at her house. “I think the tax system is … I’m afraid people are going to lose their homes over it, if it keeps going up.”
Harris, 90, now widowed and living on her husband’s retirement check as her sole income, is the embodiment of the debate raging right now in the Idaho Legislature over property taxes.
Harris sent a letter to the editor to the Idaho Statesman because she wanted to let people know the effect that rising property taxes is having on people like her. She also sent the letter to Rep. Gary Collins, R-Nampa, who is chairman of the House Revenue and Taxation Committee, which approved a bill sponsored by Rep. Mike Moyle, R-Star, to freeze local governments’ property tax budgets.
The bill, which freezes the property tax portion of taxing districts’ budgets for one year, with the exception of school districts, passed the House Revenue and Taxation Committee with a “do-pass” recommendation last month after three days of exhaustive, at times combative, testimony.
The Idaho House passed Moyle’s bill, 46-23, on Feb. 25. The bill is on the Senate side for consideration.
“If we do not solve this problem, (voters) will solve it for us,” by running a citizen initiative that reins in property taxes, Moyle said.
On the one hand are local government officials — mayors, city council members, county commissioners, mosquito abatement district directors — arguing that a freeze on property tax budgets would force them to cut into services.
On the other hand are advocates for local residents like Arvilla Harris, arguing that without relief, some people may be forced to sell their homes.
“My health is good, but I am so frightened as to how I am going to be able to stay in my home with these escalating property taxes,” Harris wrote in her letter.
‘Two Idahos’ when it comes to property taxes
Harris’ situation illustrates some of the elements of this very complex problem.
But there’s a third element at play here — the divide between rural and urban Idaho, between the Treasure Valley and the rest of Idaho.
Freezing budgets may not break the bank in the city of Boise or Ada County, but it just may be the difference between life and death in places like Madison and Custer counties. And a property tax budget freeze in fast-growing Ada and Canyon counties likely won’t result in lower property tax bills for people like Harris anyway, especially if we continue to see skyrocketing property values.
In the meantime, we need to find solutions for people like Arvilla Harris, who truly are at a breaking point through no fault of their own, other than by simply staying alive and in their homes for a long time, while everything around them explodes.
What would help Harris is a combination of increasing the homeowners exemption, increasing the state’s circuit breaker program and getting some government expenses, such as new school buildings, off the property tax bill, would go a long way in helping people like Harris.
For sure, cutting Boise and Ada County’s budgets would also help Harris, and I agree that reining in out-of-control city and county spending needs to happen. But local voters should make those calls, either at budget time or at election time, not state legislators applying the same rules to Melba as it does to Boise, to Custer County as it does to Ada County.
Taxes tied to property values
What really is at fault is what’s happening with property taxes and the real estate market in the Treasure Valley.
Boise is one of the fastest-growing cities in the country, and that growth has put upward pressure on property values.
Homes prices in Ada County set a record in January. The median price of the 719 homes sold during January was $363,000, according to the Intermountain Multiple Listing Service. That broke November’s record of $359,900.
Because property taxes are calculated by multiplying a taxing agency’s levy rate by property value, property taxes rise as property values go up and local governments’ budgets increase.
The city of Boise’s property tax budget has gone from $113.6 million in 2013 to $159.2 million in 2020. That’s an additional $45.6 million, or a 40% increase, in just seven years. Some of that is due to growth, but most of it is due to increased assessments and consequent property tax increases on homeowners like Harris.
That’s what Moyle’s bill aims to halt — local governments’ property tax budget. Another bill he’s sponsoring would cap any property tax budget growth to 3%, including any new construction and annexation.
Rural Idaho could get plowed under
But parts of the state that aren’t growing as quickly as the Treasure Valley aren’t seeing the boom in budgets.
Commissioners from counties such as Madison, Washington and Custer last week testified to the Revenue and Taxation Committee that budgets are already tight.
“Phrases have been used that we need to pause and we need to slow down,” Madison County commissioner Brent Mendenhall told the committee. “Being from Madison County and the tundra of Idaho …. this is not a pause or a slowdown. House Bill 409 is slamming on the brakes on an ice-covered road.”
Mendenhall conveyed budget concerns from his fire chief, who said he would have to decide whether to send out three EMTs to a scene or two EMTs in cases of emergency if budgets were frozen. His road and bridge administrator already receives complaints from taxpayers when roads aren’t plowed because of budget restrictions. A property tax budget freeze would make it even worse, Mendenhall said.
“Can we make cuts? Yes,” Mendenhall said. “Do we slam the door? It’s irresponsible. … House Bill 409 right now needs to go. It needs to not get out of this committee.”
Custer County commissioner Wayne Butts said officials there are talking about the possibility of dissolving the county because of tight budgets.
A state divided: rural v urban
Opponents of Moyle’s bill argued that there are “two Idahos,” one urban, one rural. One is made up of Ada and Canyon counties, and the other is basically the rest of the state. Opponents argued that punishing Ada and Canyon counties only serves to hurt other parts of the state that aren’t growing and don’t have a naturally growing tax base.
“There are 44 counties in this state, not just two,” Lucy Wills, of Twin Falls, testified before the House Revenue and Taxation Committee on Feb. 12.
Wills made the case that people who live in a part of the state that has more amenities have to pay higher taxes.
“You live in a beautiful area, close to a ski mountain, close to an airport, close to all kinds of amenities, a beautiful downtown, and you have to pay for it,” she said. “I’m sorry, that’s just the reality of things. You know, if I can’t drive a Cadillac, I drive a Toyota. Those are choices you make based on your income, based on your budget.”
Collins didn’t catch the drift of her argument at first: “So you’re speaking in favor of the bill?” he asked her.
“Oh no, I’m speaking against the bill,” Wills said.
“So you’re happy with your taxes?” Collins asked, incredulously.
“I am,” she said. “There’s nothing wrong with paying —” at which point Collins cut her off and thanked her for her testimony.
Meanwhile, government officials from the Treasure Valley testified that with growth comes increased costs of providing services.
More people means more roads, more schools, more inmates in the jail, more people getting drivers’ licenses at the DMV office, more judges and more police officers, teachers and firefighters.
Relative to other places in the country, $2,000 in annual property taxes is not out of the question.
That’s little comfort to Harris and other folks like her, who are struggling to make that payment.
Harris said she makes do as best she can, but for the first time in her life, she didn’t pay her property tax bill in full this year.
“I’ve always paid the full amount,” she said. “This year it was so high, I only paid half.”
And if it goes up another $200 or $300 next year?
“It just makes it harder to pay it,” she said.
Harris said that in the 53 years she’s lived in the house, it still has the original carpet, original bathroom and original kitchen — including the original built-in stove. She replaced the refrigerator and the furnace. She also painted the house herself at one point.
“That’s about all,” she said.
Homeowners exemption, school budgets
Harris now qualifies for the full homeowners exemption of $100,000, bringing her net taxable value to $145,900.
State legislators capped the homeowners exemption at $100,000 in 2016. If the exemption had continued to be tied to inflation, that exemption today would be worth $135,850, according to Kathlynn Ireland, property tax specialist with the Idaho State Tax Commission. With that exemption, that would have brought Harris’ taxable value down to $110,050.
The state could also consider adding a special category to the homeowners exemption to people like Harris to apply a targeted cut to those who need it most.
Further, while 42%, or $832, of Harris’ tax bill goes to the city of Boise, another 31.5%, or $626, goes to the Boise School District, some of which is used to build new schools and repair or replace others through voter-approved bonds. In Idaho, the only mechanism to build new schools or make major capital improvements is to issue bonds, which are paid back by property taxes. If the state allowed school districts to collect impact fees, that could also lessen the property tax bill on people like Harris.
Circuit breaker program qualifiers
When I asked Harris about the state’s circuit breaker program, otherwise known as the Property Tax Reduction program, she said she has used it in the past and has been able to get an offset from her property tax bill. But she was also under the false assumption that she needed medical expenses to qualify for the circuit breaker. Since she didn’t have many medical expenses in the past year, she said, she probably wasn’t going to get a circuit breaker this year.
While medical expenses can add to the amount a person receives, they’re not necessary to qualify. Being older than 65 and having an income lower than a set amount qualifies you for a circuit breaker. Other parameters include whether you are a widow or widower, disabled, blind or a veteran.
Alan Dornfest, property tax policy bureau chief for the Idaho State Tax Commission, told me that only about half the people who qualify for the circuit breaker use the program. While qualified homeowners can receive up to $1,320 off their property tax bill, the average is $650 off a tax bill, Dornfest said.
The state spent about $19 million out of the state’s general fund on the circuit breaker for those who qualified.
The fact that circuit breaker money comes from the state’s general fund was a source of agitation for Moyle during the committee hearing for the property tax budget freeze legislation.
As Rep. Tammy Nichols, R-Middleton, pointed out to Ada County Clerk Phil McGrane during his testimony, the circuit breaker, itself, is a tax shift, taking money out of the state’s general fund to pay for county and city property taxes.
Regardless, a bipartisan bill to expand the circuit breaker program is being proposed.
State Sens. Grant Burgoyne, D-Boise, Kelly Anthon, R-Burley, and Dave Lent, R-Idaho Falls, on Sunday announced draft legislation that would increase Idaho’s Property Tax Reduction program benefit from $1,320 to $2,000 and adjust the income thresholds required to qualify for the property tax relief.
Making the circuit breaker easier to fill out and increasing the amount to target people like Harris would be a good way to shelter what we consider vulnerable populations.
In the meantime, Harris said she’s hopeful legislators get the message on property taxes and the need for relief.
And I am, too.
“People are complaining about their taxes,” she told me while we sat in her living room, which is filled with a lifetime of photos and memories. “And I think they’re going to have to do something about the taxes.”
“I just got by with what I had. … Just by saving and watching everything and being careful. I lived in the days when you just kind of got by with what you had, you made do.”
This story was originally published February 19, 2020 at 6:00 AM.
