Get rid of property tax in Idaho? Sure, but replace it with what? | Opinion
To be honest with you, I don’t disagree with the sentiment behind the Idaho GOP’s new party platform plank to get rid of property taxes.
Here’s what the party platform now says:
“We believe property tax is incompatible with true private property ownership. A tax that allows the government to place a lien on and ultimately seize a citizen’s home for nonpayment is fundamentally at odds with the right to own property. No Idahoan should face the loss of their home because they cannot keep up with a government assessment of what their property might sell for. We support the elimination of property taxes to protect the private property rights of all Idahoans.”
When I first bought my house in Boise in 2013, my annual property tax bill was somewhere around $2,300. Today, it’s more than double that.
It’s increased primarily because of the assessment of my home’s value and the rising budgets of the city of Boise, the school district, the county, the Ada County Highway District, etc., as well as the cap on the homeowners’ exemption.
Even with my mortgage paid off, if I don’t keep paying my property taxes, the government can step in, seize my house and sell it off to the highest bidder.
But our property taxes pay for police officers and firefighters, ambulance services, schools, a community college, parks, roads, sidewalks and, my favorite, mosquito abatement, among other things.
If not for property taxes, how do you pay for these necessary functions of government?
Idaho GOP chairwoman Dorothy Moon mentioned to KTVB that increased timber sales could help make up some of the difference. But we’re talking about more than $2 billion in property tax collections in Idaho. That’s a lot of trees that would need to be felled.
She also mentioned sales tax, a more reasonable alternative.
You may recall that a few years ago, state Rep. Jason Monks, R-Nampa, proposed “a thought grenade” of eliminating the property tax in Idaho and replacing it with an increase in the sales tax.
His proposal called for an increase from 6% to 11.3%
Based on current sales in Idaho of $50 billion, that would generate about $5.65 billion in taxes, an increase of $2.65 billion, which would be enough to make up for lost property tax revenue.
But sales taxes are not reliable. They plummet in times of economic distress. What then? Just lay off police officers and firefighters? Stop mowing the lawn at the city park?
And then you have the problem of doling out the money. Currently, cities and counties set their own budgets based on their own needs. With a sales tax model — collected by the state — cities and counties would be at the mercy of what the state decides to send them. So much for local control.
And then, do you really want to pay 11.3% on everything you buy in Idaho (which, by the way, still includes groceries)?
What about income taxes? The state collects about $3 billion in individual income taxes. To collect $2 billion more, rates would have to increase 67%. Corporate income taxes would have to triple.
Scott Herndon, a North Idaho Republican who is a property tax elimination champion and likely will head back to the Senate this November, told Idaho EdNews that his plan doesn’t call for increasing sales or income tax rates. Instead, he is banking on overall growth in the state economy to increase tax revenue. By $2 billion? While Idaho legislators like Herndon cut taxes every chance they get? Fat chance.
With apologies to Winston Churchill, yes, property taxes are the worst form of taxation — except for all those other forms that have been tried from time to time.
Scott McIntosh is the communities editor and columnist for the Idaho Statesman. You can email him at smcintosh@idahostatesman.com or call him at 208-377-6202. Sign up for his free weekly email newsletter The Idaho Way.
