Bill Description: House Bill 292 would create a school district facilities fund with general fund dollars, which districts could use in place of property tax levy money; allocate certain general fund dollars to property tax relief for most homeowners; eliminate the March election date; and allow more people to qualify for the circuit breaker property tax relief program.
The Idaho State Constitution, Article III, Section 16 says, in part, “Every act shall embrace but one subject and matters properly connected therewith, which subject shall be expressed in the title. …” The scope of this bill, which includes not only tax policy, but also a change of election dates, is stretching the boundaries of what constitutes a single subject.
The statement of purpose and fiscal note on H292 are unacceptable in a tax bill of this importance. Granted, this is a complex bill with multiple parts, but the numbers in the description don’t match the numbers in the text box. It is understandable that ranges are used, but the lack of clarity in the presentation of the numbers makes it difficult to evaluate the impact of this bill.
Does it directly or indirectly create or increase any taxes, fees, or other assessments? Conversely, does it eliminate or reduce any taxes, fees, or other assessments?
House Bill 292 would create Section 33-911, Idaho Code, which would establish a school district facilities fund in the state treasury. The bill says, "The moneys shall be distributed by the state department of education to each school district … on a per-pupil basis" to "be used in place of property tax levy moneys" for, in order of priority, "payment of existing school bonds," "payment of supplemental school levies," savings "in a reserve account by the school district for future school facility construction or renovation needs," and "for use in securing and making payments on a new school facilities bond."
This school district facilities fund would be funded in part by a new and ongoing allocation of 2.25% of sales tax revenue, according to the bill's amendments to Section 63-3638, Idaho Code. One-time funding would also come from the "Idaho tax rebate fund" found in Section 63-3024B, Idaho Code. Additional funding would come from "any excess cash balance in the general fund" over the next three years per the newly created Section 57-810, Idaho Code.
According to this law, "The amount of moneys received by a school district pursuant to this section must be deducted from a school levy that would otherwise have been paid by property taxpayers." It also says that "such moneys may not be duplicated by the collection of property tax," but there is nothing in the bill to prevent a school district from seeking additional bonds or levies after using state money to pay down existing ones.
This policy should result in property tax relief, at least in the short term. But given the insatiable appetite for taxpayer dollars routinely demonstrated by school districts and the lack of any prohibitions or caps imposed on the districts' ability to seek bonds and levies, there is no reason to believe that these additional taxpayer dollars from the state will lead to a long-term reduction in property taxes unless voters unexpectedly alter their behavior and stop approving bond and levy questions.
Perhaps the most concerning element of this proposal is that a school district that pays off an existing bond or levy with these state funds could come back in mere months to ask voters to approve an even larger one.
House Bill 292 would create Section 63-724, Idaho Code, for the stated purpose of providing "property tax relief on owner-occupied properties in Idaho receiving the homestead property tax exemption … by providing state moneys as replacement funding as provided in this section."
County assessors would be instructed to "prepare a homeowner property tax relief roll," which would include "the current year's levy for the tax code area in which the property is situated," "the amount of eligible property taxes levied on each qualifying homestead," and "the total amount of eligible property taxes levied on all properties within the county that are receiving the homestead property tax exemption as of the second Monday in July of each year."
The state tax commission will then "determine the total number of homeowner property tax relief homesteads to be allowed in each county, the dollar amount of eligible property taxes for each homeowner property tax relief homestead allowed, and the total dollar amount of eligible property taxes for all homeowner property tax relief homesteads within each county."
The property tax relief would not be allowed to "exceed the actual amount of current eligible property taxes due on the homeowner's property tax notice" or be used for any "delinquent property taxes, penalties, interest, or fines."
The "homeowner property tax relief account" would be funded in part by a new and ongoing allocation of 2.25% of sales tax revenue, according to the bill's amendments to Section 63-3638, Idaho Code. One-time funding would also come from the "Idaho tax rebate fund" found in Section 63-3024B, Idaho Code. Additional funding would come from "any excess cash balance in the general fund" over the next three years, per the newly created Section 57-810, Idaho Code.
This program should result in meaningful property tax relief for a significant number of Idahoans. It should be noted, however, that this program is not available to all Idahoans, but only owners of residential property receiving the homestead exemption. Renters, for example, also pay sales taxes, yet they will receive no direct benefit from this property tax relief program, which is funded in part through a portion of sales tax revenue.
Does it in any way restrict public access to information related to government activity or otherwise compromise government transparency, accountability, or election integrity? Conversely, does it increase public access to information related to government activity or increase government transparency, accountability, or election integrity?
Idaho law currently allows four election dates, with those in March and August restricted to recall elections and school bond and levy questions.
House Bill 292 would amend Section 34-106, Idaho Code, to eliminate the March election date.
Unfortunately, it would leave the August election date in place and fail to do what is necessary to consolidate Idaho's elections to the more familiar dates in May and November.
Election consolidation would increase government transparency and accountability because voters are more aware of the May and November elections, and turnout is consistently higher then.
Additionally, consolidation would reduce spending because counties across the state spend time and money administering these March and August elections. Bond and levy questions could be more efficiently addressed by voters just 2-3 months later on the normal May and November election days.
The only reason bond and levy questions are run during these March and August elections is that districts seeking bonds and levies can take advantage of the reduced voter turnout.
Eliminating the March election date is a positive step, but it is a half-measure that acknowledges the broader underlying problem while failing to fully resolve it.
Does it increase government redistribution of wealth? Examples include the use of tax policy or other incentives to reward specific interest groups, businesses, politicians, or government employees with special favors or perks; transfer payments; and hiring additional government employees. Conversely, does it decrease government redistribution of wealth?
House Bill 292 would amend Section 63-705, Idaho Code, which deals with the property tax relief program, commonly known as the "circuit breaker." This bill makes two changes, increasing both the income and home value thresholds for the program.
The income threshold is increased from $31,900 to $37,000, which is a 16% increase. The home value threshold is increased from $300,000, or 150% of "the median assessed valuation for all homes in the county receiving the homestead exemption" to $400,000 or 200% of this valuation.
While the 16% increase in income and 33% increase in home valuation might be partially explained by inflation, the increase in the median assessed valuation is particularly troubling. Someone living in a home worth twice as much as the average home in the county is probably not in the greatest need of a redistributive tax shift.
At its core, the "circuit breaker" is a redistributive program that allows a small number of homeowners to pay less in property taxes and correspondingly forces their neighbors to make up the difference. By increasing the income and home value thresholds for the program, House Bill 292 would exacerbate this redistribution.