Senator Has Plan To Limit Property Tax Hikes Riggs Will Try To Limit Assessment Increases To A Maximum Of 7 Percent

State Sen. Jack Riggs wants to do something about the huge increases in property values that have driven up some homeowners’ taxes.

“Because of the growth in this area, the rapid rise in assessments becomes a problem,” said Riggs, R-Coeur d’Alene. “By virtue of the market, your property taxes go up.”

Riggs is working on a plan to limit assessment increases to a maximum of 7 percent. Anything over that would be deferred to future years.

“You would not have a year where your property value doubled,” he said. “It could catch up. But I think some mechanism needs to be in place so the assessor can’t simply assess you at a much higher value just because there’s a lot of growth and property values have increased in your area.”

Kootenai County Assessor Marv Vandenberg, a Democrat, said such a deferral might be difficult to manage but the idea is on the right track.

“Anything that would give the taxpayers relief should be given a chance,” Vandenberg said.

Under state law, each county assessor must revalue 20 percent of the property in the county each year. Thus, values are brought up-to-date on a five-year cycle.

Last year, rural subdivisions in Kootenai County were revalued, Vandenberg said. For many reasons, their values hadn’t been updated since 1989.

“In some cases, they were horrible jumps,” he said. “The values seemed to really go through the roof.”

State tax commissioner Anne Barker said large increases in value have been a problem in some regions of the state but not statewide. Kootenai County is one of the problem regions, she said.

“It just depends on where people are buying property.”

But limiting increases in assessments could run afoul of Idaho’s constitutional requirement for an equitable property tax system - one that charges everyone fairly in proportion to value.

“I’ve always been told when you talk about putting a cap on value, you’re really talking about trying to amend the state Constitution,” Barker said.

Carl Olsson, a deputy attorney general for the state Tax Commission, said Idaho Supreme Court decisions have said clearly that property should be taxed on the basis of its fair market value. But, he noted, the courts have upheld partial exemptions which take a portion of the value after it has been calculated and exempt it from taxation.

The homeowner’s exemption is among the best-known. It exempts 50 percent of the value of an owner-occupied home, up to $50,000, from property tax.

Riggs’ idea could possibly be structured in the form of a tax exemption to meet the constitutional concerns, Olsson said. “But certainly, it would have to be carefully crafted.”

Vandenberg, who served in the Idaho Legislature for more than a dozen years, said he tried to win a deferral of increased taxes due to higher assessments for senior citizens, with the taxes to be paid back either when the homeowner dies or when the house is sold. He also pushed to expand the homeowner’s exemption to include the lot as well as the house.

“That would really level out the playing field in high-value areas such as Kootenai County, Canyon County, Sun Valley and those places where the home site values now are probably, in some cases, equal to the value of the improvements.”

Last year, Gov. Phil Batt indicated he might support some type of limit on assessment increases. Batt’s spokesman, Lindsay Nothern, said Monday that the governor had looked into the idea. “He’s not sure how it would be obtainable because it probably is going to require a change in the Constitution, and it’s a pretty complex process.”

But if legislators came up with a plan, Nothern said, “He would certainly take a look at it.”

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