Property Tax Commentary and Tenant Rights

RENTAL ISSUES 

The session is almost over and we still have not addressed property tax relief nor any real meaningful solutions to help tenants who are struggling all over the state due to a lack of housing stock and rent increases that are outpacing Idahoan’s salaries. Rep Rubel got a bill passed to extend the time to notify tenants of a rent increase from 15 days to 30 days.  However, after the apartment association intervened her original time period of 45 days was reduced to 30.

I introduced H595 that would have required the landlord to provide a walk through of the rental property and an itemized receipt of any damages assessed to the tenant so tenants have a path forward to get their security deposit returned. It was so disappointing that my GOP colleagues could not afford a little fairness to tenants. All they want is to have a fair shot of getting their security deposit back. What’s so tough about doing a walk through of the premises and “showing your work” by providing an itemized receipt of charges. Just like a renting a car, right? You conduct an inspection when you pull off the lot and when you return and if there are charges, they’re itemized. Not too hard!  However, earlier that week, the GOP easily passed a bill to requiring a tenant move out within 3 days of an eviction by a judge. That is a tight window and very unreasonable. There was a lot of testimony opposing the bill, but that one flew out of the house like a t-shirt out of a t-shirt cannon.

The Idaho Legislature talks about local control for cities and counties but, in practice, sends unfunded mandates down to local governments, shifting the state’s burden for public services to them without adequate revenue options. This session the public is justifiably outraged at rising property taxes. When the Legislature removed the index on the homeowners exemption, it created a tax shift from commercial property taxes to residential. This is exacerbated by a huge population influx and the rapid increase of property tax values. Important public services need to keep pace with the expanding pressure, but instead, the state is underfunding many of these services which will undoubtedly increase your property taxes more! When the state shirks its responsibility to fund things like education appropriately, the burden of the cost goes to the county. And since the only tax a county can levy is on property, the individual property tax payer has to foot the bill of the state mandate.  Here’s how the state’s budget cuts, including the Governor’s newest line of cuts, impacts your property taxes:

1. Education is the biggest recipient of property taxes because the legislature has only increased its budget by 1.5% in the last 10 years with 1,500 more students added annually. Over 30% of our school districts’ budgets now come from supplemental levies.
2. Our Corrections system is busting at the seams. State inmates are being sent to county jails which are overcrowded, and the state is underpaying counties for this service. This is unsustainable and a liability to our counties and sheriffs. Ada County has already had to raise property taxes to compensate and left the Sheriff to sue the state for adequate reimbursement.
3. The legislature plans to take $8.5 million from counties for Medicaid Expansion. Most likely the state will take it out of the revenue sharing it gives to counties. If assessed by population, some counties will be unevenly impacted by the loss and still be required to maintain indigent medical care.
4. States and counties are required by law to provide adequate public defense, court processes, prosecution services, and emergency management, which are all underfunded.
5. Most of our transportation budget goes to state road/bridge maintenance and selective new construction for congestion mitigation. Precious little is provided for rural highway districts and county roads/bridges which is a public safety issue. Some counties have tried, but failed, to levy property taxes for dire road needs.

Several Democratic proposals related to property taxes are languishing in the chairman’s drawer without any meaningful discussion. Rep Moyle introduced H409, legislation to cap county budgets, which even he admits will increase property taxes.  Here are a few solutions and discussions that need to happen:

• Property Assessment: One of the problems we are experiencing is that the assessment of property is done based on market value.  As people move to our city in droves from more expensive places, they are driving the home prices up due to supply and demand issues.  There are also predatory buyers in the mix who have been purchasing homes for cash and then letting them sit to find the highest bidder which, once again, works against the working class folks who have been living in our neighborhoods.
• Homeowner’s Exemption: Several years ago, the legislature (led by my GOP colleagues) capped the Homeowners exemption which shifted the property tax burden from corporate to residential.  This cap removed the index which cuts the amount we can exempt for taxes.  However, since then, the assessed values are so high that returning the index would not even be sufficient to cover the burden on property owners.  We would need to raise the exemption from 100,000 dollars to 200,000 to even make a dent in our district. 
• Property Exempted: In Ada county, we also have the burden of having LOTS of property taken off the tax roles which again creates a burden on homeowners to make up for budget needs in the county. Property that is exempt includes state government land, hospitals, churches, and leases on gov’t property.  I recently requested a list of all property off the tax rolls in Ada county, but we couldn’t identify that because no one is assessing it. I will have to do some more digging on that. 
• Air BnB’s: There are a growing number of Air BnB’s in our neighborhoods as Boise grows and serves as a destination city. This complicates matters in neighborhoods and has an impact on families.
• Circuit Breaker: There is a program for elderly people who meet income requirements to apply for a tax exemption, but this exemption has not been adjusted in many years. There is a discussion about a bill that may double that exemption which is a step in the right direction, but this still hasn’t come been heard. 
• Growth in NOT paying for growth: I am in conversations with stakeholders about how we might create impact fees for schools and to revise our current impact fee assessment on development to allow for funds to stay closer to the area of development and possibly incentivize public transportation projects. We need to find ways to have growth pay for itself instead of being on the backs of our working families.