A bill that supporters say would provide between $205 million and $355 million in property tax reductions in its first year is heading to the floor of the Idaho House of Representatives for a vote.
On Monday, the House Revenue and Taxation Committee voted to advance House Bill 292, a compromise property tax reduction bill that combines elements of House Bill 77 and House Bill 79, which were introduced earlier this year.
If passed into law, the bill would take money from several different sources to do multiple different things.
- It applies a portion of the funding to apply a credit that homeowners would receive for their property tax bill on their primary residence with a homeowner’s exemption.
- Beginning in the second year after the bill takes effect, it applies a portion of the funding to school districts to make their bond and school levy payments. That money would be divided between school districts based on their average daily attendance.
- It increases the income limits for participation in the circuit breaker program from $31,900 to $37,000 per household, and it increases the cap on a home’s assessed valuation from $300,000 or 150% of the median valuation of all homes in the county to $400,000 or 200% of the county median assessed valuation.
- It would eliminate an election date in March, one of four days each year that local school districts use to bring bond issues and levy requests before voters for consideration. If the bill passes, school districts could only run bond issues in the May, August and November elections.
Funding would come from brick-and-mortar sales tax collections, online sales taxes, state budget surpluses, the state’s tax rebate fund and a one-time cast transfer from the state’s general fund.
By the third year the bill is in effect, between $182.4 million and $332.4 million would be directed to property tax reductions, depending on whether and how much of a budget surplus the state has available.
Boise State survey shows Idahoans are concerned about their property tax bills
A coalition of influential Republican legislators, including House Speaker Mike Moyle, R-Star; House Revenue and Taxation Committee Chairman Jason Monks, R-Meridian; Joint Finance-Appropriations Committee Co-chairman Scott Grow, R-Eagle; and Senate Local Government and Taxation Committee Chairman Doug Ricks, R-Rexburg, worked on the bill.
Even though many of the discussions took place behind closed doors, property taxes have been one of the most prominent issues of the 2023 legislative session. A Boise State University public policy study found that 55.9% of Idahoans said their property taxes are too high, and Gov. Brad Little called for property tax relief in the State of the State address that kicked off this year’s legislative session.
“Property taxpayers, I think, have seen their property taxes go up significantly and they are demanding relief, and I think this bill, House Bill 292, is an attempt to respond to that,” Monks said during Monday’s public hearing over the bill.
During the public hearing, Quinn Perry, the deputy director of the Idaho School Boards Association, testified against removing the March election date that school districts use for bond and levy proposals.
“This date is used by the overwhelming majority of school districts, especially those who rely on supplemental levies to maintain the operations of their public schools,” Perry told legislators. “As you can imagine, predictability and stability are two key factors in operating Idaho’s public schools system, and we believe that removing this date is removing the one that provides the most in predictability and stability.”
Perry said personnel costs are the biggest costs in a school budget, and districts use supplemental levies to make sure they have the funding available to issue teacher contracts for the upcoming school year.
Canyon County Controller Zach Wagoner told legislators Monday that under the bill there would be a disparity between how much money residents of the same county would receive for property tax reductions based on the school district boundaries they live in. Wagoner said residents who live inside the boundaries of school districts that have bond issues or supplemental levies on the books would see smaller property tax credits than those who live in school districts without bonds or levies because voter-approved school bonds and levies are exempted from the definition of eligible property taxes in the bill.
Voting for property tax relief forces supporters to eliminate March school election dates, Democrat argues
Assistant Minority Leader Lauren Necochea, D-Boise, voted against advancing the bill. Necochea pointed out that legislators who opposed House Bill 58, which would have removed both the March and August school election dates, are being forced to vote for removing the March election date in this bill if they want to pass property tax reductions. The other bill passed the House 43-26 but was sent out for amendments in the Idaho Senate and has yet to be voted on the floor.
“Taking away the March election date is a poison pill in this bill,” Necochea said.
Several Republican legislators on the committee described the bill as a compromise, saying that its overall benefits outweigh any negative aspects.
“There is a lot of good in here,” Rep. Kenny Wroten, R-Nampa, said. “… If we wait for perfect that is just never going to happen.”
In the end, the House Revenue and Taxation Committee voted to send House Bill 292 to the floor with a do-pass recommendation.
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House Bill 292 could reach the House floor for a vote in a couple of days — although legislators have the ability to fast-track legislation and could take up the bill very quickly if they suspend rules.
If the Idaho House votes to pass the property tax bill, it would be sent to the Idaho Senate for consideration. If the bill passes the Idaho House and Idaho Senate, it would go to Little’s desk for final consideration.
Monday may mark the beginning of the second-to-last week of the 2023 legislative session, with GOP leaders pushing to adjourn for the year on March 24. However, there is no requirement to adjourn the session by a certain date.
The 2023 session gaveled in on Jan. 9, and Monday was the 64th day of the session. The length of sessions can vary, but sessions generally run for 75 to 90 days.