Senate debating property tax amendments

BOISE – The first round of amendments to a series of House-passed property tax reform bills ended in the Senate on Thursday evening with agreement on an amendment to just one bill.

Senators will continue debating amendments to the rest of the bills today.

House Bill 676, the one bill successfully amended, does away with what’s known as the “developer’s discount,” which allows some rural land developers and speculators to pay agricultural rates, giving them a significant tax break.

The senators unanimously approved an amendment to delete a clause that would have allowed the loophole to continue if an owner transferred land to family members.

“It’s nice to start with the easy ones first,” said Sen. Tim Corder, R-Mountain Home.

Senators spent the next hour debating two amendments to HB 421, a bill to increase the homeowner’s exemption, but ran out of time and adjourned for the evening.

“I’m very disappointed today that we adjourned in the middle of the amending order to allow the Democrats to go to a fundraiser,” said Sen. Shawn Keough, R-Sandpoint. “This is a huge issue for people in northern Idaho. We’re being chastised by people at home saying we’re not doing anything.”

But Keough said the Senate’s tax committee actually has been closely studying all the bills since January. The committee sent six House-passed reform bills to the Senate’s amending order, where any senator can offer amendments.

One of those bills was taken off the amending order midday Thursday, after no one offered any amendments. That bill, HB 680, sets up a state-sponsored deferral program to allow some low-income disabled or elderly homeowners to defer their taxes until they die or sell their homes.

Senate Majority Leader Bart Davis, R-Idaho Falls, told the Senate, “It’s my understanding that no one is contemplating any amendments to the bill.” So the Senate agreed unanimously to move the bill off the amending order, so it can come up for debate and an as-is vote.

The change in the homeowner’s exemption, which hasn’t been raised from its current $50,000 limit since voters enacted it by initiative in 1982, is a central part of the property tax debate.

HB 421 would raise the limit to $75,000, include land in the value rather than just improvements, and index the top amount to inflation in the future.

Senators began the debate Thursday by looking at amendments to move the top amount up to $100,000, and to index the exemption to the Idaho Housing Price Index rather than the currently proposed Consumer Price Index.

Senate rules for amending bills require all amendments for a particular bill to be debated before votes are taken, so though debate was complete on the first amendment, no vote was taken because additional amendments for HB 421 were left.

Sen. Elliot Werk, D-Boise, urged his colleagues to support increasing the exemption to $100,000.

“This is the only thing that we’re considering that actually attacks the real problem,” Werk said.

But Sen. Tom Gannon, R-Buhl, said he believes the change only benefits those who live in an area with rising home values.

“We have to think of those small towns where this is not happening and what we will do to those towns in those counties that don’t have the high growth,” Gannon said.

Bills still up for amendment include measures to shift part of school operations funding off the property tax, and to raise the sales tax to make up part of the difference.