House Bill 354 — Foregone reserve

Lindsay Atkinson 2020 House bill ratings Leave a Comment

Bill description: HB 354 would require local taxing districts to pass a resolution in order to reserve foregone 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 foregone 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 “foregone balance.” Unless the taxing district explicitly passes a resolution disclaiming the foregone 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, foregone balance is a system whereby Idahoans can be retroactively taxed.

HB 354 would change the process for accumulating foregone balance by requiring that taxing districts explicitly pass a resolution to reserve the foregone balance for use in a future year. Instead of being able to accrue foregone 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 foregone-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 foregone amounts without having to specifically reserve them. Consequently, many taxing districts have been reserving and collecting on foregone balances.

Of the over 1,000 taxing districts across the state, only three taxing districts disclaimed their foregone 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 foregone money from previous years, totaling over $8 million.

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