Governor releases property tax plan

BOISE – Gov. Dirk Kempthorne introduced his property tax plan to the Legislature on Monday, offering proposals to expand an exemption for the poor, defer taxes for the elderly and disabled and close a much-exploited loophole for agricultural property.

Legislators and elected officials say some Idaho residents are clamoring for property tax reform, claiming taxes are rising too fast because of rising property values and more expensive school levies.

One of Kempthorne’s bills proposes an expansion of the property tax exemption for low-income residents. The bill would raise the maximum household income for the program from $22,630 to $30,000 a year. In his State of the State address, the governor said that plan would make 10,000 more households eligible for the exemption at a cost of $7.3 million. Currently the exemption helps 26,000 households and costs $15.4 million.

Kempthorne also wants to defer property taxes for low-income elderly, disabled and widowed property owners until they die or their homes are sold.

The governor also wants to repeal an exemption that lets landowners in rural areas avoid thousands of dollars in property taxes by claiming the land is used for agriculture. However, he would allow owners who currently take the so-called developer’s discount to keep using it until 2010. Kempthorne takes the exemption on his own 14-acre property in Valley County, paying $5.72 a year in property taxes.

The three bills proposed by the governor are just part of a growing mound of property tax proposals.

House Revenue and Taxation Committee chairwoman Dolores Crow, R-Nampa, said there have been 16 property tax bills introduced in her committee so far. She expects that number will reach at least 20 before Friday’s cutoff for personal bill introductions in the House.

The House is devoting an entire special committee hearing at Boise City Hall starting Jan. 30 to hear testimony from the public on the measures. It could last three days.

Business and agricultural groups such as the Idaho Farm Bureau have cautioned against proposals that would shift the tax burden to them.

Also, both Crow and Kempthorne, also a Republican, have said many of the property tax relief issues would be better handled by local governments.

Still, House Minority Leader Wendy Jacquet, D-Ketchum, said the governor’s bills don’t do enough to address “real property tax relief.” Jacquet, a member of a legislative committee that met over the summer to discuss property tax relief, said taxpayers want more, including an increase in the amount of their homes’ value that can be exempted from the property tax. “He’s not listening to the people,” she said.