Senate Minority Caucus Chair Janie Ward-Engelking (D, Boise) at the Idaho Capitol on April 6, 2021. (Otto Kitsinger for Idaho Capital Sun)
A property tax relief bill that raises the homeowner’s exemption by $25,000, changes details of the circuit breaker program and caps growth percentages in local budgets squeaked through the Idaho Senate on Wednesday by a vote of 19-16, with nine Republicans voting no.
The Senate debated the bill for about an hour, with several senators echoing debate in the House of Representatives on Tuesday that the bill doesn’t do enough for residential homeowners because the exemption increase is too small. Democrats and Republicans have also raised concerns that the increase to the maximum circuit breaker exemption from $1,320 to $1,500 comes at the expense of people currently participating in the program. An analysis released by the Idaho Center for Fiscal Policy also details concerns about the change.
House Bill 389’s sponsor, Rep. Mike Moyle, R-Star, has said about 15% of those currently in the program will no longer be eligible in 2022 because their home is assessed at more than 125% of the median home value. The bill’s statement of purpose says this will “ensure the General Fund no longer subsidizes income-poor but asset-rich applicants.”
In addition, the bill:
- Increases the personal property exemption – which affects businesses – from $100,000 to $250,000.
- Exempts transient personal property from taxation, which applies to construction, logging and mining equipment that travels across the state.
- Creates an 8% cap on property tax increases that account for new growth in any budget year. By statute, each taxing district is allowed to increase its property tax budget by 3% in a given year, plus a budget amount for new growth.
- Delays a new construction project’s market value from being added to new growth calculations until after construction is completed.
Sen. Fred Martin, R-Boise, said he thought there were good and bad provisions in the bill, but voted for it because it’s a “starting point.”
“I like the circuit breaker going from $1,320 to $1,500, but I don’t like it tied to the value of the property,” Martin said. “… We need to continue to work on property tax relief to get it right.”
The bill is of particular concern to legislators and public officials from Canyon County and the city of Nampa.
City officials and fire department staff have testified to committees and emailed legislators saying they are against it because it will be detrimental to their budgets because districts would not receive as much funding from taxes on new construction. It has been particularly concerning to Nampa Fire because of a recent annexation that would increase the fire district’s size.
Sen. Jim Rice, R-Caldwell, said he received an opinion from Idaho Attorney General Lawrence Wasden that Nampa’s annexation will not be subject to the 8% cap.
Those factors weren’t enough for Democrats, including Sen. Janie Ward-Engelking, D-Boise.
“I have waited all session to see a property tax relief bill, and I can’t tell you how disappointed I am to see this bill before us,” Ward-Engelking said. “This bill is not the bill we need. It does very little to help the constituents in my district, and my biggest fear is that if we pass this bill, people are going to expect that it’s really going to help them, and then what they are going to find out is that it didn’t.”
Sens. Jeff Agenbroad and Todd Lakey, both R-Nampa, joined Republicans who voted against the bill.
It now heads to Gov. Brad Little’s desk for signature or veto.
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