A one-year freeze on most property tax budgets is one step closer to reality after vote
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Cynthia Sewell, Idaho Statesman
BOISE (Idaho Statesman) — Following an hour-long debate that included barnyard analogies about a stubborn stub-tailed cow and selective rat eradication, the Idaho House on Tuesday voted 46-23 to pass a bill putting a one-year freeze on local governments’ property-tax budgets. The freeze does not apply to schools.
The bill’s sponsor, House Majority Leader Mike Moyle, R-Star, told House members the freeze is necessary so state lawmakers and local government officials can come together and find a solution to Idaho’s rising property taxes.
Moyle said, “If we do not solve this problem, (voters) will solve it for us,” by running a citizen initiative that reins in property taxes.
“If we do not find a solution soon, we are driving out people who have lived in Idaho their whole lives, and through no action of their own, are being forced out their homes,” he continued.
In Idaho, the state collects income and sales taxes, but not property taxes. Local taxing districts, such as schools, counties and cites, collect property taxes, but not income or general sales tax. The state does share a portion of sales taxes it collects with local taxing districts.
All 14 House Democrats and nine Republicans voted against the bill, arguing that a one-year freeze is too onerous and it affects taxing districts from cemeteries to cities to counties. Some noted the rising property tax problem occurs in just the urban areas, not rural ones, thereby unfairly and unnecessarily putting a freeze on rural districts.
The freeze does not mean any taxing districts are going to get less money, Moyle said. “They will get what they got the year before.”
“Think about your budget. Do you think if you were required next year to hold your budget flat with what you had this year you would be successful?” Moyle asked.
When the state of Idaho had a downturn in the economy several years ago, it “made the adjustments necessary and we cut almost 30% out of the general funds in this state because it needed to be done,” he said. “This bill does not do that.”
Moyle said his bill does not call for any holdbacks or cutbacks. It simply freezes for one year property tax collections at the prior year’s level. But it does not freeze property owners’ property taxes. Property taxes could go up or down, depending on the property’s value and the levy rate each taxing district has to set to collect at the prior year’s level.
Additionally, cities, counties and other local taxing districts will still be able to collect new property taxes on any new construction, along with any increases in fees or other revenue they receive, including state and federal money.
“This bill will hold you harmless while we try to find a solution. This bill says let’s all sit down and find a solution,” Moyle said.
HB 409 goes to the Senate for a committee hearing. If the committee votes to advance the bill, it will go to the Senate floor for a full vote.