Property taxes, tax relief and the Legislature

In what will most likely be my final update from Boise for 2023, I will be concluding the ongoing saga of our property tax legislation.

As was stated at the beginning of February, most, if not all, of the Legislature began the 2023 session with the intent of addressing the rising property tax rates that most Idahoans were experiencing. Legislation passed in 2022 did little to immediately bring relief and this was frustrating to legislators and the public alike.

Three strong proposals came to the fore during the first few weeks of the session, and negotiations began in earnest, once the drafts were printed and made available to the entire Legislature and to the public. The result of the negotiations were that one idea was dropped and the authors of the other two began trying to reconcile their ideas into one piece of legislation.

There is always a bit of angst when large, important pieces of legislation are introduced in the waning days of a session. Often there can be the feeling that decisions are being made without input from the public, as well as the rest of the Legislature, and that the late introduction is a strategic ploy to apply pressure to the body to pass a law because most members are wanting to adjourn and return to their normal lives.

While I cannot definitively say that this manipulation never occurs, it has been my experience that late bill introductions are due to ongoing negotiations between the sponsors of a bill, the leadership teams in the House and the Senate, and the governor. All of whom are necessary to ensure that a consequential piece of legislation has the opportunity to be heard, voted on, and, should it pass the Legislature, ultimately signed into law. H292 was introduced 10 days ago by the House Revenue and Taxation Committee, passed out of committee four days later, passed off the floor of the House the next day, passed out of the Senate Commerce and Taxation Committee two days after that, and now will be considered by the entire Senate on the 20th or 21st.

This legislation provides immediate and long-term property tax relief to all property tax payers in Idaho. The first year of the bill will provide up to $355 million dollars in property tax relief. The second and third year, approximately $110 million be used to reduce property taxes for owner occupied tax payers; approximately $100 million will be used to reduce property taxes for all property tax payers. Essentially, 75% of the tax relief will go to homeowners, with the remaining quarter being shared by other property tax payers.

Another approximate $100 million will be distributed to school districts on an average daily attendance basis. School districts are required to use funds in the order of priority as follows: (1) payment of school bonds (2) payment of school levies (3) saved for future school facility construction needs (4) used for new bonds. The impetus with this portion is to provide building funds for school districts going forward so that bonds and levies will not have to be used to address these needs in the future. This legislation also eliminates the March date that school districts can use for elections.

Circuit breaker criteria are also relaxed to allow more people to qualify for tax relief, especially those who were forced out of the circuit breaker program due to changes in 2022. The relief of up to $355 million will impact property owners beginning in December of 2023. Year 2 of implementation will provide property tax relief up to $272.5 million in December of 2024. Year 3 of implementation will provide property tax relief of as much as $332.4 million in December of 2025.

Everyone seems to be united in the effort to get this legislation passed in order to provide immediate property tax relief to the citizens of Idaho. However, there is always the possibility of political posturing and trading that happens at the end of a session which could jeopardize the effort, but I remain confident we will see H292 become law before we adjourn for the year.

Sage Dixon represents Bonner and Boundary counties in the Idaho Legislature in District 1B. He can be reached at sdixon@house.idaho.gov.