H292 Property Tax Bill …Brace Yourself!
THE GOOD NEWS
- Homeowners should see significant property tax relief in year one with H292.
THE BAD NEWS
- H292 REMOVES THE MARCH ELECTION DATE FOR SCHOOL DISTRICT BONDS/LEVIES which could have devastating impacts on school districts who need funding for schools that the legislature doesn’t fund.
- Right now more than 85% of school levy elections take place in March, outside of the partisan May primary: it’s partisan politics that are advancing voucher bills for private schools so you can imagine how a May levy election will go for public schools. And if forced to wait until November, they can’t effectively build their budgets for the school year, losing teachers and other resources.
- SHORT TERM GAIN and LONG TERM PAIN. Long term modeling suggests that homeowners will start to see a decline in relief after year one and more declines over time.
- This bill does nothing to address the tax shift from commercial properties to residential properties after the homeowners exemption was capped in 2016 by GOP leadership; this contributes to the decline in returns for homeowners.
- Cities will see declines in revenue which impacts local services like police, water, emergency services, parks, etc.
- Local highway districts will see major declines because we take money from the Transportation Expansion and Congestion Mitigation Fund for tax relief.
THE UGLY NEWS
- The plan is so complicated that few people can explain it. The diagram has more arrows than an archery target.
- The on-going funding for relief comes from revenue that is susceptible to economic downturns which won’t help homeowners.
Where does the money come from?
The bill identifies 5 sources of funding, 3 of those on-going sources and 2 of those one time.
Ongoing Sources
- Surplus Eliminator (Idaho code 57-810) = $150M in 2024
- Internet Sales Tax Fund (Idaho code 57-811) = $37M
- Sales Tax Distribution (Idaho code 63-3638) = $120M
One Time Funding and It’s Gone
- Tax Rebate Fund (Idaho code 63-3024B) = $130M left over from the last income tax rebate
- One Time Transfer from the Gender Fund = $75M
Where Does the Money Go?
All this money will go into 3 big financial buckets
- School District Facility Funds
- Homeowners Property Tax Relief
- Property Tax Relief to All Property Owners***
Who Does This Help?
- Buckets #1 and #2 above will help residential property owners
(who have been upside down in their taxes since the GOP capped the homeowners exemption, shifting the burden of taxes onto residential homeowners), but - Bucket #3 continues to give a tax break to commercial, agriculture and other properties, which perpetuates the tax shift that is harming homeowners.
THE BEST AND EASIEST SOLUTION FOR HOMEOWNERS?
Remove the cap on the homeowners exemption and index it to mirror inflation. That takes care of the tax shift that residential property is shouldering and provides greater, immediate relief! And if the commercial properties are paying too much, we can adjust that after the fact.
A bill to do that would be a few sentences and not 20 pages where we draw money from one source to cover another.
I will continue to do my research and will vote in the best interests of our community. If this is the only tax relief bill that is allowed to come forward, and it provides some immediate relief, I will reluctantly vote for it…reluctant due to the potential bad, long term impacts. Stay tuned…
Check out these two opinions who are right on point!
Idaho Republicans’ property tax bill is more like Frankenstein’s monster | Opinion
A Message from the Idaho Democratic Party Chair: GOP Property Tax Bill Has Poison Pill for Schools