BOISE — Despite steadfast opposition from local government officials across Idaho, a proposed one-year freeze in property tax rates advanced to the House floor on a party-line vote Thursday.
Following two days of public comment, the House Revenue and Taxation Committee recommended approval of the bill, which is sponsored by House Majority Leader Mike Moyle, R-Star.
The legislation freezes property tax collections at 2020 levels for all non-school local taxing districts, including cities and counties. Districts can exceed the cap with a two-thirds public vote.
The hearing testimony was split between private citizens — almost all of whom supported the freeze — and local government officials, who said it would harm their ability to provide services.
Ada County Clerk Phil McGrane pointed out that the legislation freezes the property tax portion of local government budgets. However, it would not freeze property tax bills for individual homeowners; that amount depends on a host of factors, including local market values, changes in assessments and changes in property classification.
“We did the analysis,” McGrane said. “If we had frozen our budget at 2019 levels, 82.8 percent of residential properties would still have seen an increase in their property taxes in 2020.”
Without the freeze, he said, 91.3 percent saw an increase. So a freeze might provide some limited tax relief, but only for a fraction of homeowners.
While sympathetic to the sharp increases some homeowners are seeing in their tax bills, McGrane noted that rising market values are driving the changes — not profligate spending by local governments.
If lawmakers really want to provide tax relief, he said, they should consider increasing the homeowners exemption or expanding the circuit breaker program, which provides relief for the elderly, disabled veterans and others.
That brought a sharp retort from Moyle, who said those solutions simply shift the tax burden to other property owners.
In the city of Star, he said, residential properties account for 95 percent of the property tax base.
“You can’t shift (the burden) to commercial,” Moyle said. “So how honest is it for you to promote a solution that just shifts the burden back onto the same people who need relief? There’s no where else to shift it.”
Throughout the two days of hearings, Moyle repeatedly asked local government officials if they could find enough savings in their multimillion-dollar budgets to survive a one-year freeze. Most either dodged the question entirely, or only reluctantly admitted that they could get by.
“So what do I tell Grandma?” he asked McGrane. “You have a $24 million budget but can’t hold the line for one year, so she has to find savings in her budget (to pay for an increase in property taxes)?”
Rep. Rod Furniss, R-Rigby, said his sympathy goes out to his local county and city officials, who have “done a great job” holding the line on expenses.
“I think this is an Ada, Caldwell, Nampa problem,” he said. “You’ve pushed growth onto taxpayers’ backs. ... I wish you guys would take care of your problem. We watch our money. We don’t incentivize growth on the backs of widows. That growth needs to pay for itself. I’ll vote to move this forward, (but) I’m going to have to beg forgiveness from my commissioners and mayors.”
Rep. Lauren Necochea, D-Boise, described the proposed freeze as “a sledgehammer approach to a complex issue.”
“It won’t actually reduce property taxes for homeowners,” she said. “I don’t see how we in good conscience can take a reckless approach that will impact crucial services.”
Moyle acknowledged the freeze wouldn’t solve the problem of rising property taxes, but he said it’s the only approach that gets everybody to the table to find a solution.
“Everyone admits we have a problem, but nobody wants to find a solution because we’ve never forced the issue,” he said. “We have to find a solution — but if you don’t advance this bill and force people to come to the table, you’ve ended the discussion.”
The legislation passed its first hurdle with a party line vote and now goes to the House floor for a vote.
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