Bill to end indexing of homeowner’s exemption clears Senate panel on 6-3 vote
The Senate Tax Committee has voted 6-3 in favor of HB 431, the bill to remove the annual indexing from Idaho’s homeowner’s exemption from property taxes. The vote moves the bill to the full Senate; if it passes there and receives the governor’s signature, it’ll become law.
“Really what we’re talking about here ... it’s a tax shift,” said Sen. Dan Johnson, R-Lewiston. “Setting the exemption at $100,000 is not going to eliminate the tax shift. It really just comes down to whose ox is gored. … I’m concerned that I don’t have more support from my district for this, and I wish that I would have had a little more time at least to consider it.”
Sen. Steve Vick, R-Dalton Gardens, asked Idaho Association of Realtors lobbyist John Eaton why his group sees this bill as a priority, when “it would appear that if we pass this bill, then going forward … more taxes are going to be paid by homeowners than by the other sections, if prices go up. So I’m just curious as to why the Realtors thought that this was an important piece of legislation, because it seems like most of your business is residential real estate.”
Eaton said, “Realtors in this state represent a lot more than just owner-occupied residential. Idaho is also a very popular state for secondary homes. ... We also are very strong on the economic development side, and getting more business here creates more employment which creates more people who want to buy homes. … You’re shifting a bunch of tax to businesses and to secondary homes and to ag and to all these other sectors of the economy.”
Sen. Jim Rice, R-Caldwell, declared, “Indexing is a failed system, it doesn’t work, it puts most of the burden on working families.”
Senate Tax Chairman Jeff Siddoway, R-Terreton, said, “If it were up to me, I probably would just get rid of all the exemptions on homes, lower the rates at the county level.” But he said that’s not what’s before the committee today. Siddoway said he likes the bill. “To me it does create stability, it creates stability for our counties,” he said.
Sen. Curtis McKenzie, R-Nampa, said he supported the indexing a decade ago, but wouldn’t have now, knowing how it worked out. Sen. Cliff Bayer, R-Boise, agreed. “Not only were expectations not met, but it was kind of disappointing, quite frankly,” he said. He said he didn’t get much relief on taxes on his home. “I do subscribe to some measure of stability and predictability. ”
Said Sen. Jim Guthrie, R-McCammon, “This is a pretty generous exemption that’s not matched by other states.”
Those voting in favor of the bill were Sens. Siddoway, Guthrie, McKenzie, Rice, Vick and Bayer. Those voting against were Sens. Johnson, Stennett and Burgoyne.
