Bill aims to make property taxes more equitable, transparent

BOISE — Will an ability to make apples-to-apples comparison regarding tax expenditures help local government entities improve efficiency and reduce property taxes?

That’s the hope of the interim Property Taxes and Revenue Expenditures Working Group.

The working group was formed after lawmakers failed to reach consensus on property tax relief during the 2020 legislative session. One of its top recommendations is to create a standard statewide accounting manual and reporting system.

The goal is to ensure that cities, counties and other local taxing districts all report expenditures in the same way, so taxpayers can better understand how their tax dollars are being spent and how the performance of one district compares with others around the state.

Legislation authorizing the standardized system was introduced in the House Revenue and Taxation Committee on Monday.

“Having this accounting system means we’ll be able to compare apples-to-apples,” said Rep. Jim Addis, R-Coeur d’Alene, who co-chaired the interim working group. “It allows for bench-marking, which can lead to efficiencies, which can lead to lower property taxes.”

Local taxing districts currently report expenditures in a variety of way. That lack of uniformity makes it extremely difficult to compare performance between similar districts, Addis said. Having a standardized accounting system and improved transparency will hopefully make it easier for taxpayers to identify the outliers — those districts that do something particularly well, as well as those that seem to be spending too much money in a given area.

“This bill doesn’t tell local districts how much they can spend or what they can spend it on,” he said. “It simply ensures that, when those dollars are spent, they can be tracked in a uniform manner.”

Addis cited a Harvard Business School case study that found large firms saw an average 10 percent reduction in costs by using this “data-mining” approach to bench-mark their own performance.

“I’m not saying we’ll get that, but that’s what the real world sees,” he said. “Right now, local taxing districts levy about $2 billion in property taxes every year. Ten percent of that would be $200 million. Let’s get conservative and cut that in half; that’s a possible savings to Idaho taxpayers of $100 million. Let’s get real conservative and say we only save 1 percent. That’s still an aggregate $20 million in savings. That’s a significant savings, and it (provides more) transparency for all of us.”

The State Controller’s Office would create the standard accounting manual. Local taxing districts would report expenditures to the controller’s Transparent Idaho website, making the information readily available to taxpayers across the state.

The bill calls for all local taxing districts to shift to the new system by 2025.

Addis noted that the legislation is 25 pages long. He’ll go over it in detail once it comes back to committee for a public hearing.

EBERT APPOINTMENT — The appointment of former Clearwater County Commissioner Don Ebert to the Idaho Fish and Game Commission earned a thumbs-up from the Senate Resources and Environment Committee.

The committee sent the nomination to the Senate floor with a favorable recommendation. Ebert has been serving on the commission since July.

Spence covers politics for the Tribune. He may be contacted at bspence@lmtribune.com or (208) 791-9168.