Moyle bill would cut local government budgets to make up for state-granted tax breaks

House Majority Leader Mike Moyle, R-Star, introduced legislation this morning to cut the budgets of local taxing districts whenever anyone gets a big new property tax exemption - like the big one lawmakers granted to Micron Technology several years ago when they capped its taxable value; that exemption is now shifting $2.5 million a year in taxes to other taxpayers in the county as a result. “So we’re trying to figure out how not to make that shift happen,” Moyle told the House Revenue & Taxation Committee. He said his bill also would cut local taxing districts’ budgets when, say, a church buys property and builds a tax-exempt church, or a non-profit hospital buys a for-profit clinic property, or a highway district buys property for a public road.

Rep. Bill Killen, D-Boise, said, “I think I understand what your bill does, but I don’t understand why it does it.” Killen said if, for example, a big Boise hospital buys a nearby private clinic, “Police, fire, everything else has to continue to service that property. … You’re going to reduce the budgets of those responsible jurisdictions. They have the same level of service they have to provide, but now they have fewer dollars to provide it. Why is that a good idea?”

Moyle said, “I think it’s a fundamental question we need to discuss - is it fair to shift that tax burden for a church or for a Micron or for a hospital or for a highway district to other taxpayers? … I firmly believe it’s not fair, as we look at the property taxes and the way the property taxes are going up, that we keep shifting the burden on those who are paying more property taxes.”

Moyle said his bill could be retroactive to Jan. 1, 2011, to reverse the Micron tax shift in Ada County, or it could take effect in 2012; that way, the total estimated statewide cuts to local government budgets would be $1.6 million a year, rather than $4.1 million. Rep. Lenore Barrett, R-Challis, moved to introduce the bill, and her motion passed on a divided voice vote.