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Local governments lose credibility over property taxes

Local governments lose credibility over property taxes

Wayne Hoffman
October 10, 2020
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October 10, 2020

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Next legislative session, city and county officials and their hired lobbyists will arrive at the Capitol to object to property-tax relief. I hope they get laughed out of the building. Local officials’ handling of Gov. Brad Little’s proposal to provide a one-time property-tax cut to Idahoans is proof-positive too many local government officials don’t truly appreciate the raw outrage bubbling up throughout the state over 10 to 30 percent annual increases in their property taxes. Or at least they don’t rank as a high priority. 

Little’s tax relief plan is clever, thoughtful, and unique. I’m not just saying that because the Freedom Foundation came up with the idea, which the governor built upon. I’m saying it because Little’s proposal is the only one in the country that uses federal CARES Act funds to help local taxpayers without creating a new government program, handout, or expense. The governor proposed taking $200 million of the state’s $1.25 billion federal coronavirus money and giving it to cities and counties to cover the costs associated with public safety, relieving the burden on property taxpayers, allowing taxpayers to keep more of their own money. 

Little announced at the start of October that a majority of taxpayers would benefit from the program. He noted in a press release, “Our focus is to support our communities and our police, fire, and EMS personnel and ensure there are no reductions in public safety during these unprecedented challenges.” He continued, “I appreciate the cities and counties working with us to ensure the resulting budget savings are given back to the people of Idaho in the form of property tax relief rather than backfilling local government budgets.”

He's being polite, folks. In fact, only about 25% of Idaho counties and 20% of Idaho cities chose to participate. Though Ada County taxpayers will benefit from the tax relief plan — saving them up to 20 percent on their property taxes — residents in neighboring Canyon County won’t. Kootenai County is also out, although its largest city, Coeur d’Alene, is in. Twin Falls County said no, but Twin Falls city said yes.

Local officials’ excuses boil down to the fact that the U.S. Treasury Department hasn’t explicitly green-lit the program. However,  as I have explained to several county commissioners, the Treasury Department doesn’t do that. No one in the agency processes requests from the states as concerns their various plans to spend trillions of dollars. Instead, the department has provided “guidance” when answering questions about how the money can be spent. The department  provided guidance three times, and three times clarification was given that validated the governor’s approach. 

Still, recalcitrant county commissioners and mayors claimed that they risked lawsuits if they accepted CARES Act funds and used them for property-tax relief. Or officials argued, they’d undergo a financial review that would later require the repayment of the money. The risk was too great, they said. And besides, local officials added, it’s not a lot of money anyway: handfuls of dollars for each $100,000 in valuation. I’ll acknowledge that everything a government entity does invites some amount of risk. Here the risk to accept the funds is miniscule, though it’s 100%  guaranteed the unspent money will be used to grow government and property taxes will rise. 

To use federal CARES Act funds represented a rare opportunity for the local governments to return money to taxpayers, to provide relief for problems related to the coronavirus — much of which was caused by government. Yet, too few local Idaho officials embraced it. In a matter of months, at the start of 2021, lawmakers will again consider property-tax relief. And countless Gem State city and county officials will squawk, using taxpayer-funded lobbyists to do the squawking. It’s a credibility-defining moment. Legislators should remember what happened during Covid-19 — what cities and counties did and did not do to help residents —  and act accordingly.   

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