teton county courthouse

“It reduces our ability to take on new construction,” said Teton County clerk Kim Keeley about a new property tax bill. “If we have several years in a row of growth and more people building out in the county, not within the cities, the cost to keep taking care of the roads goes up, but the property tax levy does not.”

While the end of the 2021 Idaho State Legislature session has come and gone, after a record 122 days, the effects of this marathon session are already starting to show themselves.

One of the most debated bills to be signed by Gov. Brad Little is an update to Idaho’s property tax code. HB389 was signed into law on May 12 and was made effective retroactively to Jan. 1, 2021.

Concerns about the HB389’s effects have been echoed throughout rural areas of Idaho. Opponents point towards poor policy, such as the 8 percent year over year cap on the growth of total property tax budgets.

Property tax budgets are primarily responsible for new county-funded construction such as roads and bridges, explained Teton County Clerk Kim Keeley.

“Where do I begin…,” Keeley said. ”It reduces our ability to take on new construction. If we have several years in a row of growth and more people building out in the county, not within the cities, the cost to keep taking care of the roads goes up, but the property tax levy does not.”

Another area where rural communities have found disagreement with the property tax bill is a change to the taxing district’s ability to limit how much new construction and annexation value is shown.

Property tax rolls are a detailed list of information regarding an individual’s property and subsequent property tax within a specific area or jurisdiction. Each individual city/county/state (jurisdiction) can legislate property tax laws to generate revenue. Revenue is then appropriated to county districts, such as fire districts, school districts, and road and bridge districts among other services.

“Again, fire is one where there are more people out in the county, they have to deal with that, and their budgets are not going to keep up with the growth,” said Keeley. “It’s shortsighted of the legislature.”

Another contentious part of HB389 is the circuit breaker, Idaho’s property tax reduction system. This system is put in place to provide relief to populations struggling to afford their home, including certain veterans, the elderly, widows, and the blind.

Two qualifications must be met to receive relief via the circuit breaker: the individual must make under $31,900, and the individual must have status as one of the groups mentioned above.

Under the updated HB389, $1,350 worth of relief will be increased to $1,500. This will inflict a necessary rise in the program’s funding to $2 million. To pay for this, current circuit breaker-enrolled individuals who possess a home that is above 125 percent of the county’s median value will be removed from the program.

HB389 also includes a 25 percent increase in the homeowner’s exemption, raising it from $100,000 to $125,000. This means that if you have a $500,000 house (value appraised by the county assessor) only $375,000 of the value can be considered when determining property tax on said property, if it is your primary residence. Keeley explained the practical effects of the homeowner’s exemption.

“The homeowner’s exemption used to be tied to inflation, now they capped it,” said Keeley. “I understand the desire to reduce property taxes or at least flatten them out but they’re going about it the wrong way.”

Keeley also expressed frustration at the state legislature’s inability to listen to Idaho’s state tax commission.

“These guys, all they do is tax policy. The farmers and ranchers and hair stylists that are our state legislators decided that they can write a better tax policy. It’s kinda crazy,” said Keeley.

A lack of understanding between those at the state legislature and their constituents is not surprising with how fast this bill went through the legislature.

2021 Legislature notes reveal that the 28-page (very large by Idaho standards) piece of legislation was introduced on May 3 and passed both the House and Senate in less than 72 hours. It was delivered to Gov. Little for his signature by 10:35 a.m. on May 6 and signed on May 12.

The bill’s author is Rep. Mike Moyle (R-Star). Moyle is also the House Majority Leader, a position that led to vitriol with other legislature members who voted against HB389. Moyle reportedly told fellow republican Ben Adams (R-Nampa) “I don’t think the good representative knows what the bill does, I don’t think he’s read it… You guys drive me crazy.”

As reported by Ryan Suppe of the Idaho Press in Nampa, concern over HB 389 was not limited to state legislators. Governor Little, who signed the bill into law, even had some reservations.

“I have always subscribed to the adage that our taxes need to be fair, simple, competitive, and predictable. When considered against these pillars of tax policy, House Bill 389 falls short,” Gov. Little said. “The bill is an aggregate of complex and nuanced changes to Idaho’s property tax code, and I am troubled that this was introduced in the waning days of the longest legislative session in Idaho history.”