Idaho cities

Property tax law pushes Idaho towns to limit growth


According to preliminary property tax assessments, Canyon County residents will see an average 30% increase in their assessments. Growth has been one of the major issues facing Canyon and Ada counties.

Nampa Mayor Debbie Kling slammed the Idaho House of Representatives and slammed the governor during an emergency morning meeting Friday for his role in passing a tax bill land which has drawn much criticism.

“I understand the difficult situation the governor was in, but I’m extremely disappointed that he signed this bill into law,” Kling said. “It was a bill that contained things that weren’t the best. House Bill 389, it has been made clear, will not provide our citizens with the property tax relief that we need.

The law, pushed by Rep. Mike Moyle and Republicans during the final days of the historically long session of the Idaho Legislative Assembly, also imposes new caps on local government budgets — an 8% limit on annual local government budget increases, an 80% cap on tax revenue that governments can earn from annexation, and a 90% cap on tax revenue from new construction.

Kling called a city council meeting to discuss the ramifications of the city’s new fiscal year 2022 budget law, currently in the works. The board also discussed potential actions to address the limitations.

“For high-growth cities, these will be limiting factors,” said Doug Racine, Nampa City’s chief financial officer. “If you have strong growth, it will hurt.”

The new caps apply to every local government budget, but for Nampa the law may add a burden.

“The timing is very, very bad for us,” Kling said.

Earlier this year, the city consolidated its fire department in the Nampa Rural Fire Protection District. The law contains specific language about how annexing a fire district will affect a city’s budget. After the first year a fire protection district has annexed a city, the city will subtract the amount of “money spent” on fire protection services in the last full year it provided them from its boundaries. budgets.

It’s unclear what “money spent” defines, but based on responses the city receives from the Idaho Tax Commission, it may need to offset millions spent on fire protection.

The law also leaves municipalities with another serious question: what levy rate to apply to new construction.

Steve Onofrei, senior system analyst for Canyon County, told council that the county assessor does not finalize levy rates until August, while municipal budgets are finalized in July.

In the past, cities and counties used the previous year’s levy rates to apply to their budgets. However, Onofrei said the new law requires cities to apply the current year’s levy rate to new construction in the current year. This is not possible with the timeline.

In preparation for the new caps, Caldwell City Council was planning to vote Monday night on a moratorium on residential development in the town. According to the town’s program, the moratorium would be “in response to the imminent peril to the safety and well-being of the citizens of the town of Caldwell…”

Nampa City Council has taken no major action to limit developments, although member Darl Bruner said the city should pause to approve residential development.

“Where I stand, we need a break,” he said. “It’s on residential. It won’t be perfect, but until I can get a better idea of ​​the cost of service and the tax impact on the city, on any new app, I will be personally put on hold.

City staff will work on case-by-case tax impact studies on annexations and new developments, Kling said. There were a number of annexation and multi-family development demands on the council’s agenda on Monday evening.

Meridian City Council plans to discuss the impact of the new law during a business session on Tuesday afternoon.

Gov. Brad Little signed the bill into law last week, but not before issuing a letter of approval that looked more like a veto letter.

“I have always subscribed to the adage that our taxes should be fair, simple, competitive and predictable. Considered against these pillars of tax policy, House Bill 389 falls short,” Little wrote.

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