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House Bill 354 — Forgone reserve

House Bill 354 — Forgone reserve

Lindsay Atkinson
January 23, 2020

Bill description: HB 354 would require local taxing districts to pass a resolution in order to reserve forgone balances. 

Rating: +2

Does it in any way restrict public access to information related to government activity or otherwise compromise government transparency or accountability? Conversely, does it increase public access to information related to government activity or increase government transparency or accountability? 

In Idaho, whenever a local taxing district does not take the full 3% yearly property tax increase allowed by law, the amount of money it decided not to collect is considered a forgone increase. 

Under the current law, taxing districts can record exactly how much money they could have collected in the current year from residents but did not. They can consider this amount a “forgone balance.” Unless the taxing district explicitly passes a resolution disclaiming the forgone balance, it can choose to collect that money at some point in the future, in addition to its yearly tax increase, as allowed by law.

In essence, forgone balance is a system whereby Idahoans can be retroactively taxed.

HB 354 would change the process for accumulating forgone balance by requiring that taxing districts explicitly pass a resolution to reserve the forgone balance for use in a future year. Instead of being able to accrue forgone balance by default, taxing districts would have to go through the very public process of passing a resolution to save that tax for the future.

HB 354 would have a clear impact on government accountability, making the public a greater part of the forgone-balance process. 


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? 

HB 354 could indirectly lower taxes for Idahoans. Under the current system of law, taxing districts have the power to collect forgone amounts without having to specifically reserve them. Consequently, many taxing districts have been reserving and collecting on forgone balances.

Of the over 1,000 taxing districts across the state, only three taxing districts disclaimed their forgone increase in 2018, totaling $780,316: Kootenai County, the City of Nampa, and the Twin Lakes Flood Control District. Comparatively, there were 73 districts that went the opposite route and decided to collect some of their forgone money from previous years, totaling over $8 million.

The current system of forgone balances in Idaho has allows taxing districts to collect taxes retroactively. 


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