Homeowners urge property tax relief
BOISE – Support was overwhelming Monday for increasing the homeowner’s exemption and expanding a tax break for low-income senior citizens as a key House committee opened three days of hearings on property tax reform.
“As property taxes go up, people have to move out of their houses, and I think that’s not fair,” said Richard Kaylor of Boise. “I think too much pressure has been placed on the citizen as opposed to commercial.”
Don Bizallion, a Boise retiree, told the House Revenue and Taxation Committee, “I’m not a lobbyist; I’m just an individual, a homeowner, a property taxpayer getting eaten alive. … It’s not working.”
The House committee opened hearings on more than 30 bills to provide property tax relief by taking actions such as allowing local-option taxes or charging impact fees for schools. Monday’s hearing focused on four bills to increase the homeowner’s exemption and a special tax break called the “circuit breaker” that goes to low-income senior citizens and disabled people.
During the 2 1/2-hour hearing, 23 people testified – six of them twice. Of the group, only one, Idaho Farm Bureau lobbyist Russ Hendricks, opposed either proposal.
Hendricks spoke out against increasing the homeowner’s exemption, which hasn’t been adjusted for inflation since a voter initiative enacted it in 1982.
“We certainly understand there’s a problem. However, this is not an effective way to address that problem,” Hendricks told the committee. “The root cause is spending.”
He told the lawmakers, “Unfortunately what most homeowners don’t realize … somebody else has to pick up those tax dollars that they don’t pay. It’s a dollar-for-dollar shift to someone else.”
Backers of raising the exemption noted that residential property in Idaho is now paying 63 percent of the property tax, up from 47 percent in 1990, while all other types of property have seen their share of the property tax fall.
“Since 1990, residential taxes have increased six times as fast as Idaho’s population,” former Rep. Ken Robison, D-Boise, told the panel. “I think that residential taxpayers certainly are paying their share and more than their share of the cost of government.”
Rep. Dennis Lake, R-Blackfoot, who co-chaired a special legislative committee that held a dozen hearings around the state and recommended seven property tax reform bills, said, “The homeowner’s exemption is something that is foremost in people’s minds. … I think it’s become a political issue, and I think it’s one that we will need to deal with.”
Lake said the average break homeowners could expect to see, statewide, if the interim committee’s bills were enacted is about $286. The committee proposed HB 421, to increase the exemption from the current $50,000 maximum to $75,000 and index it to inflation in the future, and HB 423, to include the land value in the exemption.
Bill Goodnight of Boise told the committee, “I don’t think $75,000 is enough.”
He said in the past 15 years, his property taxes have risen 750 percent. “My monthly tax bill now exceeds the original mortgage payment on my house and now exceeds the utility bill,” he said.
Kathryn Burgess of Boise told the panel, “It’s not fair to the homeowners that just want to live in their homes.”
The interim committee also recommended HB 422, to expand the “circuit breaker” tax break to people whose annual household incomes are $28,000 or below, up from the current $22,500, and increase the maximum annual benefit from $1,200 to $1,320.
Gov. Dirk Kempthorne proposed HB 437 to leave the benefit amount the same but expand the income threshold to $30,000, allowing nearly 10,000 more households to qualify for the state-funded tax break.
Rep. Dolores Crow, R-Nampa, the committee’s chairwoman, said after the hearing that she thinks a circuit-breaker increase will pass. “That’s kind of a no-brainer,” she said. “Beyond that I’m not sure.”
Overall, she said, “What I got out of it was, we want something done, we want the Legislature to take action. Right now my mind is open. I’m going to weigh it all out and see what we have.”
Rep. Jim Clark, R-Hayden Lake, a member of the committee, said he’d vote for the homeowner and circuit-breaker increases, but several property tax bills he’s co-sponsoring with Crow seek instead to limit local government spending. “I went after it on the spending side, because that’s where I think all the problems are,” Clark said.
Rep. George Sayler, D-Coeur d’Alene, said Monday’s hearing reinforced what he heard over the summer as a member of the interim committee, “that there’s a need for and strong case for doing something for property tax relief for homeowners.”
He added, “There’s still a significant number of people that will need help beyond those that will be helped by the circuit breaker.”
Crow said the committee will continue its hearings today at 9 a.m. at Boise City Hall, starting with the final two bills on expanding the homeowner’s exemption: HB 456, which would increase the exemption to $100,000, and HB 470, which would give an additional exemption to homeowners over age 70.
A total of 33 property tax reform bills have been introduced in the Legislature. Crow said if the committee doesn’t finish hearing all of them in three days of hearings, it will continue with them in its regular, much smaller meeting room at the Capitol.