Property tax updates
S292 is the newly negotiated property tax bill.
As a member of the Local Government and Taxation Committee, I have been diving deep into the issue of property taxes this session. I am disappointed that legislation providing targeted property tax relief to homeowners likely will not move forward. Instead, we are being presented with a negotiated bill that presents several concerns:
The bill will hurt public schools. It removes the March bond and levy elections, which will prevent local school districts from running levies which fund annual raises for teachers and harm teacher retention. This strips control from local school boards and does not allow people to make timely decisions about what supplemental funding we wish to support in our local communities.
The bill does not fix the foundational issue which has led to homeowners paying more property tax. Special interests won out on this issue again, and the property tax shift which has occurred since 2016 when indexing the homeowner's exemption was removed, remains. Residential taxpayers are in most need of relief as they have experienced 10+ years of budget shift. For example – in Boise, residential burden has increased from 55% in 2012 to 74% in 2022.
The bill will provide property tax relief for homeowners in the first year (an election year), but less and less over time. It is projected that the amount of funds directed solely to homeowner relief will decline over time. The total relief in year one under HB 292 could be as much as $355 million for ALL taxpayers (not just homeowners), but that could be cut in half for homeowners in subsequent years due to the loss of one-time funding providing the relief, particularly for homeowners.
The bill will impact local governments and other state programs. A large portion of the ongoing relief that is being provided comes from the Wayfair account, which is a loss to local government budgets - and over time, will take away funding from other state programs as well including the Transportation Expansion and Congestion Mitigation (TECM) fund. This loss in future revenue could result in more local governments needing to take the full 3% growth to respond to increasing service costs, which will again result in increased property tax.
I’m happy to see property tax reform is somewhat being addressed this session. However, I’m concerned about the potential consequences of HB 292 as written.
