Bill Description: House Bill 663 would allow counties to create special property tax carve outs for housing developers.
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?
Existing Idaho law contains a provision allowing counties to create special property tax exemptions or partial exemptions for commercial and industrial projects such as factories.
House Bill 663 would amend Section 63-602NN, Idaho Code, to expand the scope of this carve out to include residential developments such as apartments and condos.
The bill grants county commissioners the discretion to exempt from property tax housing or multifamily residential facilities. This goes well beyond the exemptions current law allows for commercial properties or industrial plants. This is a very broad expansion. While the decision to grant the exemption is made by a public body, the criteria are very broad and subjective (e.g. it "will bring significant economic benefits.")
This legislation increases opportunities for cronyism or favoritism. That’s because there is no requirement that if an exemption is granted to one project, it be given to similar projects. It is all left up to the discretion of the commissioners.
Because of the way property taxes are calculated and levied, property tax exemptions do not result in decreased spending by local taxing districts. Properties granted exemptions — in this case, for up to five years — are kept off of the new construction rolls and not added to the tax levy budgets. Local governments still provide services, however, and the costs of those services get shifted to existing taxpayers who effectively subsidize the carve outs for developers.
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