Property Tax Study Committee Update

The Idaho Legislature’s Property Tax and Revenue Expenditure Subcommittee met on September 18th in Boise to explore ways to reduce property taxes without shifting who pays property taxes. The Study Committee listened to presentations from the Farm Bureau, Idaho Association of Commerce and Industry, Idaho Freedom Foundation, Association of Idaho Cities, and IAC. Among the takeaways:

• The Idaho Farm Bureau opposes raising or indexing the homeowners exemption as they fear it would shift taxes to farmers and ranchers. The Farm Bureau advocated for privatization of targeted government services as a way of reducing costs and property taxes. The Farm Bureau also advocated for more restrictive local government property tax budget caps.
• The Idaho Association of Commerce and Industry advocated for the state to fund the judiciary as a means of providing property tax relief. IACI also advocated for repeal of the business personal property tax.
• The Idaho Freedom Foundation recommended capping local property tax budget increases at 2.5%, eliminating forgone property taxes, and requiring levy rate decreases to offset increases in market value increases.
• The Association of Idaho Cities advocated for increasing the homeowners exemption and the circuit breaker.
• IAC advocated for leveraging savings from Medicaid expansion for property tax relief, increased state funding for the judiciary (district court and public defense), and leveraging surplus state general fund revenue for property tax relief.

The Study Committee also began discussing next steps and will meet on October 2nd to begin discussing draft legislation. Among the legislative proposals IAC expects the Study Committee to discuss are:

• Creation of a local government budget and revenue data portal through which local taxing districts would report budget and expenditure information, information on reserve and rainy day funds, and information on public debt.
• Potential repeal of the county medical indigent program and state CAT program, with county savings directed to property tax relief.
• Legislation establishing a secondary cap on the total amount of 3% plus new construction budget growth that a local government can budget.
• Further limits on the length of time forgone can be carried over and the purposes for which forgone can be budgeted.

The October 2nd Study Committee meeting will be live streamed on Idaho Legislature Live. IAC will send out the agenda and streaming information once the agenda is published.