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Eye On Boise

Latest property tax relief plan clears the House

The House has just voted 53-16 in favor of a new property tax relief bill – this one amended into SB 1404, an unrelated bill about school bonds that already had passed the Senate. The newly amended bill now matches up with HB 678, a bill that earlier passed the House, and then was sent back to committee in the Senate after efforts to amend it fell short. That bill would have shifted half the current school operations funding off the property tax.

A companion bill, HB 679, would have raised the sales tax half a cent to make up the lost school funding, but the newly amended bill doesn’t contain that piece. Senators could choose to revive it if they wanted to, since they have HB 679. Or, there’s talk about funding the property tax relief without raising the sales tax – by drawing down the balance in the state’s healthy rainy-day fund, tapping newly increasing state tax revenues, or a combination of the two. With healthy state revenues in March, the state now has roughly $47 million on the table as it looks ahead to next year’s budget, instead of the $13 million it had left unappropriated – if the numbers don’t change. The school funding that would be eliminated from property taxes totals about $104 million.

Some House members warned against the move. “I don’t like the idea of trying to fund property tax relief on the backs of the schools,” declared House Minority Leader Wendy Jaquet, D-Ketchum.

The measure, in addition to eliminating half the school property tax levy, caps future growth in the remaining half to 3 percent a year, and also directs all state revenues over an 8 percent growth factor into a fund to increase the property tax relief. It contains no exception to ease the impact on four school districts that, because of their property tax situation, would have to raise their taxes dramatically.

Every Panhandle representative from districts 1 through 5 voted in favor of the bill. “I’m going to support this bill even though I don’t really like it,” said Rep. George Sayler, D-Coeur d’Alene. “We’ve hit a dead end on other options.”

It’s unclear how the new bill will fare in the Senate, where, as an amended Senate bill, it will go straight to the full Senate for a vote.

Still pending is the bill to increase the homeowner’s exemption, which has passed both houses overwhelmingly but still needs a final House vote to concur in Senate amendments.

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Eye On Boise

News, happenings and more from the Idaho Legislature and the state capital.