BOISE, Idaho — The dust has settled on the 2023 Idaho legislative session. One of the headline items from this year's session is the newly imposed legislation to address property tax relief.
Lawmakers passed House Bill 292; a bill intended to distribute government dollars throughout Idaho in order to chip away at property taxes.
Idahoans wrote to KTVB inquiring about the process of the property tax relief, how it will be executed and what variables will impact total savings. For the story behind the legislation and what it is set to accomplish, House Speaker Mike Moyle detailed the newly signed law.
Moyle, a Republican from Star, starts the conversation by explaining the dynamic between state and local governments in the property tax equation.
“Let's start where it all begins with property tax, where we should start every conversation. The state of Idaho does not collect or spend property taxes. That's all done by locally elected people," said Moyle.
"Your school, your county commissioner, your city councilman, your city councils set those budgets, your fire commissioners set all those budgets and the money spent at the local level.”
The House Speaker says the bill doesn’t cut spending; it subsidizes local governments.
“So, what it does is it takes the first year or 205 million plus surplus eliminator if there's surplus, another 150 million and sends it back to the local districts, highway counties, actually, and then they lower your property taxes with part of it, half the other half goes to the schools to pay for bonds and supplementals,” Moyle added.
“Basically, what we're doing is, we took some of your sales tax money that you've been paying and we're sending it back to the locals and we're asking them to use that money to cut your property taxes.”
There have been many descriptions of what exactly the property tax relief is. Moyle shares the perspective of being a part of the team who put the legislation together.
“The best way to put it is, we're saying here's several hundred million dollars we're sending it back to the local and we're saying, cut your taxes. Now, they could raise their budgets this year and consume all that tax relief," said Moyle.
"Nobody's really talked about that because they have that option. They can raise their budgets and if they do, you won't see as much property tax relief.”
The hope from Moyle and Republican colleagues is to see property taxes be driven down around Idaho based on local decisions.
“We're hoping that in conjunction with the legislature, that these hundreds of millions that we're going to send back this year in property tax relief goes to the property taxpayers and that those local taxing districts will also do the right thing and trim their budgets to help offset any possible increase in property taxes,” said Moyle.
So, what factors could see property tax relief go further, or not far enough? Moyle said it’s really all comes down to local decisions with the new dollars in mind.
“Go look at how many people listening now, today, realize that 16.5 percent of all the sales tax the state collects go back to the locals," said Moyle. "How many of you knew that? How many of you know that the majority of the alcohol tax goes back to the local? All those programs were set up to provide tax relief.”
There is nothing in the property tax law that forces local governments to do anything with the relief dollars coming their way. Moyle said that this is a good opportunity to observe the dynamic of state and local governments.
Again, Moyle hopes individual, local taxing agencies will be responsible with the relief money sent. However, if local governments don’t come through, Moyle and other lawmakers will look to change things moving forward.
“There's nothing that makes them do the right thing.”
“I think you're going to see some do the right thing and you're going to see some substantial property tax relief. But I think you'll see some try to hide it and say the state sent them back property tax relief. So, let's make our budgets a little higher. Take as much as we can. So, I think you'll see both,” said Moyle.
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