Governor says property taxes may fall this year
Gov. Jim Risch told North Idaho business representatives and elected officials Thursday that he remains “cautiously optimistic” that the state could see significant property tax relief this year, but he’s waiting until the new fiscal year next month before making any announcements.
Increasing property values in areas like Ada and Canyon counties are catching the attention of lawmakers who once wrote off property tax relief as just a North Idaho need, Risch said at a meeting of the Concerned Businesses of North Idaho at the Coeur d’Alene Inn.
“Since the (legislative) session, this problem has gotten a line drawn a couple times under it,” the new governor said. “This thing is spreading.”
Risch has talked about calling a special session of the Legislature this summer to address concerns about rising property taxes. He said Thursday he’s waiting until the fiscal year ends June 30 before making any decisions. That’s when the state will know exactly how much surplus money is available.
Current estimates put the surplus around $168 million, Risch said, but it could be higher. He plans to release detailed proposals for property tax relief at that time, and “once that happens, buckle your seat belts.”
Risch said the best solution to the tax dilemma involves using a higher sales tax, surplus money or both to replace the school maintenance and operation portion of the property tax. Several bills to do just that failed in the Legislature this year.
Though the Legislature should have solved the problem, Risch said, “It was not like a good bottle of wine that got better with time … . The progress just wasn’t being made.”
Sen. Dick Compton, R-Coeur d’Alene, who is retiring from the Legislature, told Risch he’s ready to go as soon as a special session is called. Risch replied that the holdup isn’t among North Idaho lawmakers. “I think it’s just a philosophical thing there (in Southern Idaho),” he said later, emphasizing that attitudes on property tax relief are starting to change around the state.
Property values jumped an average of 40 percent in North Idaho this year, but Risch said people in some areas are complaining about increases of 10 percent to 12 percent.
“They’re saying, ‘Oh, this 10 or 12 is outrageous,’ and I’m saying, ‘You know folks, that’s just the beginning’ ” unless something is done soon, he said.
Critics of shifting school funding away from property taxes argue that would rid schools of their most stable source of funding. Although overblown, the governor said, those criticisms have some legitimacy.
But he said the state’s reserves, known as the budget stabilization fund, are available if needed. He criticized the Idaho Education Association’s ballot measure that looks to increase the sales tax by a penny and give the money to schools, calling tax policy through ballot measures “dangerous.”
In response to a question about whether North Idaho can be assured that the rest of the state will not try to hoard money that could be used to improve U.S. Highway 95, Risch said more money will be spent on the highway.
“There are serious problems with it, and everybody knows that,” he said.