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Spokane, Washington  Est. May 19, 1883

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Latah County officials: Idaho needs tax reform that benefits hardworking citizens

Latah County officials

To the People of Idaho,

Property taxes have been a focus of the Idaho Legislative Leadership this session. Many of the proposed bills have the effect of shifting taxes from corporations and the wealthy to lower and middle-income citizens rather than true reform. What is needed is meaningful tax reform that rebalances our broken system. The proposed property tax bills this year only contribute to the broken system. We would like to encourage our representatives and senators to vote these measures down, explain to the Idaho people how we got here, and work on true tax reform.

How did we get here?

The Idaho tax shift has been going on for a few years. In 2016, the Legislature capped the homeowner’s exemption at $100,000 rather than indexing or allowing it to rise to 50% of appraised value. This shifted property taxes away from other property types and onto homeowners, who now carry 69.9% of the property tax burden. This is the highest ever and it will continue to increase. In 2018, the Idaho Legislature conformed to the federal income tax changes, resulting in a $179 million tax cut that primarily benefited corporations and the wealthy. This reduced input into the state’s general fund has had significant effects at the local level.

The state is constitutionally mandated to provide certain services. Mandates have been pushed down to the counties, cities and local service districts without adequate funds to support the mandated services. The 2018 tax changes were reform, but in the wrong direction for a state that is one of most rapidly growing states in the country.

What are the current effects on counties, cities and local taxing districts?

  • There is not enough money to adequately fund education, resulting in another $214 million in K-12 override levies and drastic cuts to higher education. Levies are tacked on to local property taxes and higher education tuition rises as program budgets are cut by up to 30%.
  • There is inadequate funding for the state prison system. State inmates are shipped out of state at great cost or housed in county jails. The state pays county jails 65% of the cost of holding that inmate. Local residents are forced to pay the remaining 35%.
  • Public defense is a $32 million state mandate that is only partially funded by the state and the remaining is picked up by the local counties.
  • Counties and cities are obligated to provide public safety in the form of law enforcement and basic infrastructure of water, sewer and roads. With decreased revenue, maintenance and replacement are deferred, resulting in compounded future costs.
  • Local taxing districts have difficulty passing the override levies that they require for basic operations, again pushing repairs or new construction into the uncertain future.

What can we do?

  • Remind your state legislators that counties, cities and taxing districts are their strategic partners. We carry out mandates given to us by the state. Cuts, caps or freezing property taxes will result in decreased public safety, reduction of popular programs, and increased inconvenience for citizens.
  • Engage in true dialogue about tax reform that puts funding responsibility in the arena of the services delivered. Income tax, online sales tax, and a tax on vaping products are all potential sources of revenue for unfunded state mandates.
  • Allow county, city and school growth to pay for growth by allowing property taxes to be indexed to inflation combined with new construction rather than arbitrarily imposing a freeze or a cap.
  • Broaden local authority by allowing counties to index the homeowner’s exemption or assess impact fees for infrastructure expansion.
  • Adjust the circuit breaker property tax relief for our elderly residents in need.

It’s time for real tax reform that can benefit hardworking Idahoans rather than the corporations or the wealthy. Let’s put an end to mandates without money and allow us to engage in creative problem-solving as partners in service to our citizens.

Sincerely,

Latah County elected officials

Thomas C. Lamar, commissioner, chair; David McGraw, commissioner; Kathie LaFortune, commissioner; Henrianne K. Westberg, clerk/auditor; Richard Skiles, sheriff; Rod Wakefield, assessor; BJ Swanson, treasurer; William Thompson, prosecuting attorney; Catherine Mabbutt, coroner.