Senate Gets Property Tax Assessment Cap Bill

Senate tax writers on Monday unexpectedly endorsed legislation that aimed at capping the annual increases in property assessments and giving counties the option of deferring property tax payments for senior citizens.

But while both measures will now be considered by the full Senate, their chances for approval were considered limited and even if they were, prospects for clearing the House were seen as dimmer. An assessment cap measure was killed there earlier this session.

Each won approval despite serious questions about the economic and financial ramifications as well as technical application.

The proposed constitutional amendment capping annual property assessment increases at no more than 4 percent was forwarded on a 5-3 vote after Local Government and Taxation Chairman Jerry Thorne, R-Nampa, quickly moved from opposing the measure to supporting it.

“I just had to agree with the final assessment that we weren’t doing anything, and it was time to get it started,” Thorne explained.

If approved by two thirds of both houses the amendment would still have to be passed by voters in November 1996. It was because nothing can come of the proposal until after the next general election that several committee members urged taking time to refine the proposal further next year.

Ada County Commissioner Gary Glenn sponsored the amendment, calling it a starting point for addressing Republican Gov. Phil Batt’s call for controls on escalating property values. Under it, assessments would be set by county officials in 1997 and then allowed to increase at no more than 4 percent a year until the property is sold. The selling price would then become the new evaluation on which the 4 percent annual increase would be applied until the next sale. It would require public disclosure of real estate sale prices - something that industry has staunchly opposed in the past.

That provision raised concerns from Republican Evan Frasure of Pocatello because frequently commercial property is subject to distress sales that bring far below the market value.

And administration economist Michael Ferguson said that approach could create commercial disruptions as businesses are subjected to different tax burdens based on whether they have recently been sold or not. Glenn argued that not only would the

proposal finally check spiralling assessments but it would also eliminate the need for huge county assessor corps since the sales price - would fix values.

The other measure gives counties the local option of setting up a procedure to defer property tax payments for any person over 62 who fits specific economic criteria. The tax would be due upon the owners death or sale of the home.