Two more attempts to raise the cash needed to cope with the impact of Idaho’s dramatic growth were killed Wednesday as the state Legislature crept toward adjournment.
The Senate defeated House-passed legislation that would have allowed school districts, with 60 percent voter approval, to fix the rate of a property tax levy on existing bonds.
That would have kept the levy from declining as scheduled over the life of the bonds, and the extra cash could have been banked for future projects or early payoff of the bonds.
House tax writers killed a Senate-passed bill that would have delayed the 50-50 homeowners’ property tax exemption for two years on new construction.
That would have allowed local governments and school districts to collect taxes for the first two years on the full value of new homes rather than just half the value.
Both votes left only one bill alive that would create some mechanism for financing the needs that Idaho’s 3 percent annual population increase of recent years has placed on programs, services and institutions.
That bill, pending in the Senate, would allow the rest of the state to charge development impact fees. Such fees now are legal only in Ada County.
Sen. Stan Hawkins, R-Ucon, author of the homeowners’ exemption bill which died Wednesday, tried this week to amend the surviving impact fee bill to include schools. But his attempt failed.
The bill now allows impact fees for roads, parks and similar services. It is backed by Coeur d’Alene, Post Falls, Kootenai County, Ron Rankin’s Idaho State Property Owners Association, the Coeur d’Alene Chamber of Commerce and an array of industry lobbies including those representing home builders and Realtors.
Hawkins said he won’t support the bill because it doesn’t cover schools, which he contends are hit harder by growth than any other service. But he predicted the impact fee bill would pass.
“I think the stage is set now - we’re going to have impact fees instead of this (homeowner’s exemption bill). All of the terrible effects they see in my bill are going to be 10 times worse with impact fees.”
A Senate vote on the impact fee bill could come today.
Critics of Hawkins’ bill contended it would punish Idahoans who simply wanted to move up into a larger home, or seniors who wanted to move down to a smaller one, without targeting newcomers.
But Hawkins said new homes are what is stressing local government services.
“You can look at every new house and assume that that represents a property tax increase for existing homeowners,” he said.
The House Revenue and Taxation Committee voted 12-6 against Hawkins’ bill to delay the homeowners exemption on new home construction.
Home builders, real estate agents and retirees claimed during two days of testimony that the delay would only raise property taxes, contrary to the Legislature’s efforts to cut them.
The existing law exempts from property taxes half the value of owner-occupied homes up to $50,000.
Losing that exemption for two years, Sean Strickler of the Idaho Building Contractors Association said, would add over $1,400 to the tax bill on an $80,000 home in Ada County. And Strickler emphasized that 70 percent of all new construction is bought by Idaho residents.
“It will hurt a lot of people. It will raise property taxes for a lot of people,” Idaho Association of Commerce and Industry President Steve Ahrens said. “It dramatically increases housing costs.”