On June 8, 2020 Gov. Brad Little earmarked roughly $200 million of the $1.25 billion in federal funds Idaho received from the CARES Act to go to property tax relief for Idahoans. At a time when the people of Idaho are reeling economically from never-ending government mandated shutdowns, one would think it would be a no-brainer to simply accept already allocated federal funds to help mitigate the effects of those shutdowns. Unfortunately, it has been anything but a no-brainer for many cities and counties.
Under Little’s plan, participating localities will receive a one-time disbursement of CARES Act funds that will go toward covering the payroll costs of all local fire, police, and EMS services. Those savings would then be passed on to taxpayers who would then enjoy anywhere from a 10-20% decrease in their property taxes for this fiscal year.
Regrettably, despite repeated assurances through guidance given by the U.S. Department of the Treasury over the last few months that CARES Act funds can be used to cover the cost of emergency services in this fashion, and further, that states and local governments have broad discretion in using CARES Act funds, many cities and counties have still chosen not to participate, Kootenai County and Canyon County among them.
Some of the leaders in these localities are not taking these funds because they fear Little’s property tax plan is not in keeping with Treasury guidance. That concern has led to worry that one day they might suddenly and unexpectedly be required to remit those funds and be forced to increase taxes at a future date as a result of choosing to presently forgo property tax increases – something participation in Little’s plan requires.
Treasury guidance has repeatedly given municipalities assurances that CARES Act funds can be used liberally and at the discretion of local governments, despite valid questions regarding initial guidance. On September 21, 2020, Treasury again came out with guidance specifically addressing the issue.
This comes after doubts were voiced and Treasury released additional guidance on September 2, 2020 clarifying CARES Act funds may be used for emergency personnel and that it should be presumed they are serving in a capacity that allows funds to be used for their services.
The latest guidance, released September 21, 2020, has clarified that there is no intent or mechanism to recall CARES Act funds used according to the governor’s plan. The Treasury Department makes this very clear in questions 70-72.
The CARES Act was passed to provide “fast and direct economic assistance for American workers and families.” The governor’s property tax reduction plan does this by safeguarding emergency worker payroll costs and benefiting taxpayers with decreased property taxes. This maintains the spirit of the CARES Act and aligns with repeated clarifications that have been issued by the Treasury Department.
Given the most recent updated Treasury guidance, there is no excuse for questioning either the legality of Little’s plan or the intent of Treasury to allow for broad latitude with regard to state CARES Act expenditures. It’s time for cities and counties to take action and stop preventing their citizens from receiving property tax relief. Treasury’s latest guidance now leaves cities and counties all out of excuses.
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