Batt Offers Home Tax Relief Governor Considers Taxing Homeowners At Lower Rate
Idaho Gov. Phil Batt said he’ll recommend dramatic changes next year to help trim homeowners’ burgeoning property taxes.
Batt is floating reform ideas that range from new tax exemptions for rental properties to assessments for homeowners at a lower rate than businesses.
The brainstorming comes in the wake of state voters’ defeat last week of the tax-limiting One Percent Initiative.
While the initiative went down by a 2-1 margin, Batt said the vote didn’t reflect homeowners’ overwhelming desire for property tax relief.
“I believe they’re paying a disproportionate share of the load,” the governor said in an interview Tuesday.
Batt said he would unveil concrete recommendations in his January State of the State address.
But tax activist Ron Rankin - who authored the failed initiative - said Batt merely is trying to prevent him from putting it back on the ballot.
“He’s saying this so he can at least pretend that he’s heard the message,” Rankin said. “Recommending it and pushing it through is something else.”
In the meantime, the state’s top Republican is tossing out reform-minded proposals.
At a North Idaho Chamber of Commerce gathering in Lewiston on Monday, Batt said he may recommend amending Idaho’s Constitution so property could be assessed much as it was 30 years ago.
In 1965, homeowners paid taxes on 20 percent of the market value of their property, while businesses paid on 30 percent and utilities on 40 percent. The Idaho Supreme Court found that practice to be unconstitutional.
Now, homeowners, businesses and utilities all pay taxes on 100 percent of market value.
With Idaho land values skyrocketing, homeowners are seeing their tax burden rise even as government spending slows.
An amendment would eliminate the high court’s constitutional criticism and allow a return to such a tiered approach, Batt said. It also would allow the state to cap annual assessment increases.
But it would shift a greater portion of the tax burden to businesses and utilities.
“I’ve already heard some (negative) reaction secondhand,” Batt said. But “I haven’t killed the idea yet.”
Batt also said he would consider recommending apartments and other rental units receive tax exemptions. That would lead to a tax savings he’s convinced would be passed along to renters.
Simply increasing an existing homeowners’ exemption from $50,000 to $60,000 - as Democrats have suggested - “lays it all off on the renters” to take up the slack.
Senate Tax Committee Chairman Jerry Thorne, R-Nampa, was thrilled by Batt’s message.
“When it comes to not raising taxes, I’m with him 100 percent. And when it comes to giving property tax relief, I’m right there with him, too,” Thorne said. “We just have to find a way to do it.”
But Rankin accused Batt of using “smoke and mirrors” to hide the fact that he didn’t follow through on reforms promised in 1994.
“Everything he says is ‘maybe,’ ‘perhaps,’ ‘I might,’ ‘I could,”’ Rankin said. “But you can’t eat it and you can’t spend it.”
In his “Contract with Idaho,” Batt had promised to remove maintenance and operation cost for schools from property taxes, Rankin said. Instead, he removed only 25 percent of the controversial levy.
Batt said Tuesday he had promised to eliminate the levy only “within our (the state’s) ability” to soak up the difference.
“It appears our general fund is not capable of funding more relief,” he said.