Posts tagged: property tax
Here’s a link to my full story at spokesman.com on how the state Tax Commission today refused to extend a big property tax break to operators of railroad tracks, pipelines, cell towers and underground tanks, despite the urging of a roomful of officials from those firms. Had the commission acceded to the request from the companies, all other taxpayers in the counties where their property is located would have had to pay more to make up for the break. “Realize, as we play with those pieces, we start moving who pays what,” said Tax Commissioner Rich Jackson.
Idaho lawmakers this year passed a $20 million partial exemption of business personal property from local property taxes, by exempting the first $100,000 of each taxpayer’s personal property in each Idaho county from the tax. But the Legislature didn’t specify where the line fell dividing personal from real property. So the Tax Commission, working through a committee that met all summer, drafted two rules to draw that line – and the railroads, pipelines and cell towers were classified as real property, ineligible for the new break.
The Legislature authorized state funds to reimburse counties and other local governments for the lost revenue from the new tax break, but only at 2013 levels. If the new rules, which take effect in 2014, had exempted the additional classes of property, that wouldn’t have generated any additional state reimbursement. Instead, it would have forced a tax shift, requiring all other local taxpayers in the county to pay more to make up the difference.
The Tax Commission has voted unanimously in favor of its two proposed rules to define real and personal property for purposes of property tax, despite objections from railroads, utilities and similar interests. Commissioner Ken Roberts said, “There’s a lot of water under the bridge over the last several years in this. I used to wear a different hat (as a legislator), and was involved in those discussions as well. What’s interesting is until the $100,000 exemption took place, it really didn’t matter – and now all of a sudden it matters what’s real and what’s personal.”
Legislation passed this year exempts from taxation the first $100,000 worth of personal property for each taxpayer, in each county.
Roberts said the question of where the line lies between the two should have been answered by the Legislature, but it wasn’t. “Void of that direction … somebody has to make a decision about what and where that line is,” he said. “I’m sad to say that this decision has kind of found its way to the Tax Commission. … If we get it wrong, the Legislature, who are the policy setters in the state of Idaho when it comes to tax policy, can change it.”
Commissioner Rich Jackson noted that the definition affects an overall tax system, and who pays more and who pays less. “I think sometimes we have to back up and say, what should this structure do, and what should be assessed to the different players?” he said. “But realize, as we play with those pieces, we start moving who pays what.”
Commissioner David Langhorst, who like Roberts is a former state legislator, said, “I think they made good arguments, the taxpayers today.” But he said the rule takes a conservative approach. “And if the Legislature really did intend for this to be more liberally applied or a broader exemption created, then they can affirm that.”
Idaho’s state Tax Commission has a full house today at a hearing on two proposed rules setting definitions for personal property, now that the Legislature has enacted a new partial property tax exemption for personal property. Canyon County Assessor Gene Kuehn was the only person to testify in favor of the proposed rules; the room is packed with representatives of railroads, utilities and other interests opposing the rules. The big sticking point: The new rules define things like railroad tracks and pipelines as real property, not personal propertly. That means they wouldn’t be eligible for the new break.
Kuehn told the state’s four tax commissioners, “It will provide consistency. Assessors are always accused of being 44 different ways of valuations. This will keep us in line, as far as valuing personal and real property.” He said county assessors back the rule as-is. “To tell you the truth, I think we all think there needs to be some legislative direction on this, of what’s personal and what’s real,” he said. “As it stands right now, we stand by it.”
Rick Smith, an attorney with Hawley troxell representing Northwest Pipeline, Century Link, and AT&T, gesturing to the crowded room, said, “Maybe … we can take a count of how many are against it.” But a few minutes later, Commissioner Tom Katsilometes noted, “When Gene made his comment, he was representing 44 assessors.” Amid laughter, Smith said he’d withdraw his suggestion of a count.
Smith told the commission he disagrees with treating railroad tracks and pipelines as real property. “Some states take a very restrictive view,” Smith said. “New York, for example, considers all this type of property as real property. But I would submit that Idaho is not New York.” He said, “Real property includes improvements, structures and fixtures. I just don’t believe that railroad tracks is an improvement to real property. And it’s not a structure.” That would make it a fixture, he said, but it’s not a fixture that’s integral to the main purpose of the real estate, like an irrigation system for a farm.
Tax Commissioner Rich Jackson countered, “The railroad has a railroad system to function as a railroad. The telephone company has a series of assets to function as a telephone company. Cell towers are the same thing. … So I can’t quite make the distinction that you are.”
Jackson said, “Frankly, we got charged with looking at this, and we’re taking our best shot. But we aren’t the decision makers – that’s the Legislature.” Over the past 10 years, Jackson said, “Industry, the assessors and our staff tried to come to some common ground. I don’t think that will be without controversy, ever. I think controversy will continue. But I have a basic concept – here’s what’s within the boundary of a county, and how do you tax ‘em?” Smith responded, “I know everybody’s trying to do the right thing here. I appreciate all that.”
Six items in the new Tax Commission rules regarding real and personal property are drawing the brunt of the objections at today’s hearing: Cell towers, underground storage tanks, poles and towers, signposts, pipelines and conduit, and railroad track. All six are declared to be real property, not personal property, and therefore not eligible for a new partial tax break for personal property enacted by state lawmakers this year.
Gerry White of Union Pacific Railroad called the proposed new rules “discriminatory” toward railroads like Union Pacific. An Idaho Power representative called on the commission to reject the rule, prompting commissioners to note that some rule must be enacted to implement the new law.
Idaho’s homeowner’s exemption from property tax is going up, after dropping for the last four straight years, the Idaho State Tax Commission announced today. The maximum exemption for an owner-occupied Idaho home in 2014 will increase to $83,920, from the 2013 level of $81,000. It’s a sign of recovery in Idaho’s housing market, as the exemption is tied to the Idaho House Price Index, reflecting sales. “The current index shows a 3.6 percent increase in house prices for Idaho,” said Alan Dornfest, property tax policy bureau chief for the Tax Commission. “This is the first increase following four years of decreases.” Click below for the commission’s full announcement.
Idaho has set the maximum homeowner's exemption from property tax for next year: It will decline from the current $83,974 to $81,000. “The decrease is smaller than last year’s,” said Alan Dornfest, property tax policy supervisor for the Tax Commission. “This reflects the fact that housing prices trended downward, but at a slower pace than last year.”
The exemption, which is for 50 percent of the assessed value up to the maximum amount, was $50,000 from 1983 to 2006, when it was increased to $75,000 and tied to housing prices. That caused it to hit a high of $104,471 in 2009, after the state's housing prices soared, but to decline back down as prices collapsed.
The Meridian School District won't try again this summer on its failed supplemental tax levy request, the Boise Weekly reports, and instead is starting work on cuts including slashing the school year to 14 fewer days than it had two years ago and eliminating 100 teaching jobs. “The taxpayers have spoken,” Meridian Superintendent Linda Clark told Boise Weekly reporter George Prentice. “They expect us to live within the means of state funds and that's what we're going to do.” You can read Prentice's report here.
Here's how much in new property taxes Idahoans have voted on themselves so far this spring to shore up their local schools in the wake of state budget cuts: $77.32 million a year, with most of those levies stretching for two years. There's still another round of levy elections scheduled for August. You can read my full story here at spokesman.com.
A preliminary report on supplemental levy elections in held in school districts around the state compiled by the Idaho State Department of Education shows that of 36 school districts holding supplemental levy votes on Tuesday, 27 won passage from local voters, while nine failed, including, notably, one in the state's largest school district, Meridian. That means 75 percent passed. The last round of school district supplemental levy votes was on March 8; according to the department's figures, 29 districts held votes then, and 27 passed with just two failing. One of those two, Boundary County, went back to its voters on Tuesday, and this time, they passed the proposed $1.4 million levy.
All told, that means that this spring 65 of Idaho's 115 school districts asked their voters to raise their own property taxes to add to the school district's operating funds, and in 54 of those districts – that's 83 percent – voters said yes.
The moves come as state lawmakers cut state funding for schools for the third straight year, saying they didn't want to raise taxes.
Melissa McGrath, spokeswoman for the state Department of Education, said the numbers are preliminary, as the counties still are certifying their election results from Tuesday. “I think it really shows that every community makes its own decision on levies,” she said. “We at the state level do not get involved in local levy elections; we leave it up to the local communities.”
Idaho’s homeowner’s exemption from property tax will drop in 2011 to a maximum of $92,040, from the current $101,153. “The drop reflects the recent state of the housing market,” said Alan Dornfest, property tax supervisor for the Idaho State Tax Commission. In 2006, Idaho lawmakers tied the homeowner’s exemption to the Idaho Housing Price Index, which goes up and down, reflecting housing price values in the state. That year, lawmakers raised the exemption to a maximum of $75,000; before that, it had been at a $50,000 maximum since voters put it there by initiative in 1983. You can read the Tax Commission’s full announcement here.
Idaho state Rep. Phil Hart’s tax problems appear to be worse than previously disclosed. When federal tax liens filed against Hart’s various business entities are combined with the hundreds of thousands in liens the IRS has filed against him personally in his ongoing fight over back income taxes, the third-term Idaho lawmaker faces a total of more than $644,000 in outstanding federal tax liens. A state income tax judgment against him that he’s attempting to appeal pushes that total up to nearly $700,000.
Hart, who’s facing a state ethics inquiry over the use of his legislative position in his tax fight, said he doesn’t understand how the authorities could think he owes that much. “I don’t even know if I’ve made that much in that period of time,” he said, “so the tax rate must be 100 percent or something.” You can read my full story here at spokesman.com, plus see the documents.
Rep. Phil Hart, R-Athol, has filed his response to a House Ethics Committee’s charges against him; click here to read his response. In an email with his response, Hart wrote, “I want you to know that this part of the process of governance does not minimize the passion I have to serve the people of the 3rd legislative district. I sought this office because I wanted to be in a position to protect our constitutional rights and the liberties of the people. I am seeking re-election now because, with my six years of experience, I feel I can be more effective in attaining those lofty goals. American patriots fight for what is right in the country and reject is what is wrong with the country. This battle for me is no less than fighting for what is right and just in the legislative arena and in the state that I have grown to love. This battle for what is right gives me the opportunity to tell an American story. And tell that story I will.”
Hart, who is unopposed for re-election, simply denies both the charges in his response - that he abused legislative privilege by invoking it repeatedly to seek delays in his state and federal income tax fights, and that he had a conflict of interest in serving on the House Revenue & Taxation Committee while pressing those fights. He also decried the complaint against him for citing “news accounts, appearances and perceptions.”
Rep. Phil Hart, R-Athol, had this response today to the convening of the newly appointed House Ethics Committee: “I guess I would say I’m anxious to get through the process, and I’m confident everything’s going to work out OK for me.” Hart said he’s received the formal letter from committee Chairman Tom Loertscher, R-Iona, “and I do plan on responding to it.”
The newly convened House Ethics Committee promised a “by the book” investigation into the conduct of Rep. Phil Hart, R-Athol, during its first meeting today; you can read my full story here at spokesman.com. Click here to read the committee documents - the order appointing the committee, the original complaint, and a statement from the House speaker. Said Committee Chairman Tom Loertscher, R-Iona, “We want to make sure that we are completely fair in all our deliberations.”
House Ethics Committee Chairman Tom Loertscher said Rep. Phil Hart asked Speaker Lawerence Denney if he should attend today’s meeting, and Denney checked with Loertscher. “I said we won’t have questions for him today,” Loertscher said. “We will not exclude him from any of the hearings,” Loertscher said. Here is the letter the ethics committee sent to Hart, seeking his formal response to the charges.
Rep. Phil Hart doesn’t have to respond to the Ethics Committee, Chairman Tom Loertscher noted. “We may not receive a response - he doesn’t have to respond if he chooses not to.” Loertscher cautioned committee members about talking with Hart. “Just so that you know, I have not been approached by Rep. Hart at all on this matter,” Loertscher said. “I would caution the committee not to have those conversations and be careful.” Loertscher said he ran into Hart in Idaho Falls during the state GOP convention, and “he avoided me like the plague - we said ‘hello’ and that’s it.” Said Loertscher, “It was very appropriate.”
The committee has set its next meeting for Thursday July 29th at 9 a.m.
The ethics committee has four possible recommendations it can make to the House regarding Rep. Phil Hart, R-Athol: Dismissal of the charges; reprimand, which requires a majority vote of House members; censure, which also requires a majority vote of the House; and expulsion, which requires a two-thirds vote of the House pursuant to Article 3, Section 11 of the Constitution. Any recommendation also could carry a sanction recommendation, such as removal from certain committees.
Rep. George Sayler, D-Coeur d’Alene, said he’d like the Attorney General’s office to provide the House Ethics Committee with a legal briefing on the constitutional provision regarding legislative privilege from arrest or civil process during sessions. Committee Chairman Tom Loertscher, R-Iona, said, “That certainly is appropriate.” Rep. Bill Killen, D-Boise, also asked for briefing on applicable laws. Deputy
Attorney General Brian Kane said there are two issues: The constitutional privilege provision and whether it was abused, including questions about related laws; and House Rule 38 regarding conflicts of interest. On the constitutional privilege, Kane noted, “Since there is a current, live legal proceeding with regard to that, that question may actually be answered by a court.” But that doesn’t stop the committee from ruling on the issue with regard to ethics rules, he said.
Loertscher told the committee members that as soon as he receives Hart’s response, “I’ll see that you get that the minute that I receive that, so that you have a chance to review that.” Questioned by committee Vice Chair Wendy Jaquet, D-Ketchum, on whether that document and others in the proceeding are public, Loertscher said, “Absolutely. All of this is done in the open. There’s no executive privilege here whatsoever. Everything that I receive with regard to this I’ll make sure that you all get a copy of that.”
Deputy Attorney General Brian Kane told the ethics committee, “You have the authority to take testimony, to hear from witnesses.” The committee’s decision will be in the form of a recommendation to the full House, he said. “Only the full body can take final action.”
Rep. Tom Loertscher, R-Iona, chairman of the House Ethics Committee, said, “I did send a letter to Rep. Hart asking for his response. … we want to make sure that we do this correctly and that we give everybody a fair opportunity to respond.” Hart was invited in the letter to respond in writing to the ethics complaint against him. “We would expect a response back from him no later than July 14 so that we could proceed,” Loertscher said.
The House Ethics Committee has convened its first meeting; Rep. Phil Hart, whose conduct is being investigated, isn’t present.