FIRST GROCERY, PROPERTY TAX BILLS BEFORE COMMITTEE
BOISE — The House Revenue and Taxation Committee is gearing up to consider this year’s tax proposals. Wednesday’s hearing saw the introduction of several bills aimed at property and grocery taxes.
2020 Legislation, legislature.idaho.gov
Rapidly rising property taxes have been a top priority for constituents and lawmakers alike. According to GOP legislative leadership, some homeowners have seen their property taxes double or even triple in recent years.
“Especially in the high growth areas, it’s forcing some of our citizens that have lived here, some of them all of their lives, out of their homes,” said House Majority Leader Mike Moyle, R-Star. “Not only our seniors, but our young families can’t afford homes.”
Moyle introduced two bills to the committee that would limit the proportion of local budgets collected from property taxes.
Counties, cities and other taxing districts are allowed a three percent annual increase in the portion of their budgets that is funded by property taxes. Any new value generated by construction, annexation, or other factors may also be added to that part of the budget.
Moyle’s first bill would require that new value to be included in the three percent maximum, rather than being added on top. The second bill would impose a one-year temporary freeze on those budgets. For upcoming fiscal year 2021, property tax budgets would be limited to their current level with no increase.
“It doesn’t necessarily mean that your property taxes are going to go down,” said Moyle. “It puts a Band-Aid on it, and it gives the opportunity for those of us in the Legislature to sit down and find out a way to proceed with this.”
Both of Moyle’s bills include provisions to override their limits with a local two-thirds vote.
If a local government increases their property tax budget by less than the three percent maximum, the state tax commission keeps track of the difference. These uncollected amounts accrue year after year, sometimes totaling millions of dollars in urban parts of the state. Current state law reserves those unclaimed taxes as a foregone balance, which governments have the right to go back and collect in following years.
Rep. Steven Harris, R-Meridian, introduced a bill that would reverse this arrangement. Rather than retaining access to foregone taxes by default, local governments would have to specifically set aside an amount to reserve for future budgets.
While reining in property taxes is a high priority, lawmakers are also weighing another run at the grocery tax.
Idaho residents are eligible for a 100-dollar tax credit that increases to 120 dollars at age 65. House Speaker Scott Bedke, R-Oakley, introduced a bill to increase the credit to 135 dollars for all ages.
“Being one of the authors of this in the past, the mentality was we only had a limited amount of money,” Bedke told the committee, “so we bumped the amount for seniors up, knowing that we would come back later to negate the effects of sales tax on food for all citizens, but we gave the seniors a head start.”
Bedke intends to fund the increase with roughly 49 million dollars from the Tax Relief Fund, which was created when the state began collecting online sales tax last year. Governor Brad Little had called for 35 million dollars from the fund for grocery tax relief in his state of the state address.
At the end of the meeting, Rep. Priscilla Giddings, R-White Bird, made a motion to place a bill on the agenda that would remove the tax on groceries completely. Committee Chairman Rep. Gary Collins, R-Nampa, said that the proposal had not yet gone through the proper channels for him to act on it.
In an email after the hearing, Giddings said her bill mimics the grocery tax repeal approved by the legislature in 2017 and vetoed by then-Governor Butch Otter. It has now been introduced as a personal bill.
Moyle indicated that he expects many more tax bills to surface in coming weeks now that the taxation committee has finished their administrative rules review.
Sen. Jim Rice, R-Caldwell, is reportedly working on a bill to increase the sales tax from six percent to seven percent and phase out school supplemental levies.
Rep. Jason Monks, R-Nampa, has introduced a personal bill that would eliminate property tax entirely and increase the sales tax from six percent to eleven percent.
Rep. Steve Berch, D-Boise, has introduced a resolution in the House calling for a committee to evaluate existing tax exemptions, credits and deductions, which was then referred to the House Ways and Means Committee.
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