Input sought at property tax hearings

Idahoans are invited to speak out at a series of special legislative hearings starting this week, to tell their state lawmakers why so many residents are concerned about their property taxes and to suggest solutions.Sen. Shawn Keough, R-Sandpoint, co-chairwoman of the legislative interim committee on property taxes, said she’s hoping the panel’s first set of hearings, which will be held in North Idaho, will help legislators from all around the state understand local residents’ frustration.

“This committee effort and the hearing process that we’re conducting around the state does a couple things – it allows people to talk directly to legislators without going to Boise, and in so doing builds the personal understanding of individual legislators about what people are thinking,” she said.

With homeowners picking up an increasing share of Idaho’s property tax burden and property values soaring in fast-growing areas, concerns are running high, and a tax-limiting initiative is in the works.

However, Keough noted that some lawmakers don’t feel their districts are concerned about property taxes. At the panel’s first meeting last month in Boise, as it planned a statewide series of hearings, the committee’s co-chairman, Rep. Dennis Lake, R-Blackfoot, said, “I don’t think in eastern Idaho we’re going to need a particularly large room.”

Keough said, “The committee process this summer allows citizens to expand the legislators’ understanding of why there’s so much frustration. It builds the awareness that we do have areas in the state that are impacted by this that are asking for help.”

Idaho’s property taxes actually are lower than those in most states – 26.4 percent below the national average when measured per capita. But a shift has been under way for the past decade and a half, with residential property surging in value, while commercial, industrial, timber, mining, utility and other types of property have barely increased at all. In 2004, residential property owners paid a record 61.6 percent of Idaho’s property taxes.

Property taxes in Idaho don’t fund state government – they go entirely to pay for local government and schools. The state’s average property tax rate is 1.47 percent, but it varies depending on which city, county, school district, highway district and other types of taxing districts a particular property is in.

Idaho gives homeowners a break on property taxes by exempting 50 percent or $50,000 of the value of the improvements on the property, whichever is less, from taxation. That “50-50” homeowner’s exemption was enacted by voter initiative in 1982 and has never been increased or adjusted for inflation.

In recent years, state lawmakers have granted substantial property tax breaks for big business, agriculture, land developers and others. Repeated attempts to increase the homeowner’s exemption have been killed in committee. Lawmakers also have been reluctant to allow local governments other ways to fund their services besides the property tax, such as through impact fees or local-option taxes.

Keough said the hearings will begin with a brief overview of Idaho’s property tax system and how it works, and the remainder of the hearings will be devoted to public testimony.

“Depending upon how many people say that they want to provide input to us, we may or may not have to have time limits,” she said. “What I’m encouraging people to do is to recognize that there may be a time limit, and to bring with them in writing any comments they want to share or any proposals for solutions … so that they can hand that to us, so that we don’t miss what their salient points are and so that those become a part of the record.”

She added, “I think that for those who are frustrated and want immediate change, I’m asking that they come and they share their thoughts with us, and recognize that as frustrating as it may be, it’s a deliberative process so that we ultimately do the right thing. Ultimately, I hope we make some positive changes that bring relief for the homeowner.”