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Local officials: Use the law to protect taxpayers from massive tax hikes

Local officials: Use the law to protect taxpayers from massive tax hikes

Wayne Hoffman
December 1, 2017
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December 1, 2017

Here’s a problem: There are more than 1,000 taxing districts in Idaho, but this year only two—two in the entire state—took advantage of a new law intended to prevent property owners from facing ambush-tax hikes.

Our property tax system has become a complicated and expensive mess. Each fall, Idaho’s taxing districts must set their budgets. By law, those taxing districts cannot increase their property tax collections by more than 3 percent a year. But, local governments also know that if they don’t take now the full amount of taxes they’re allowed to collect, they can always later retroactively collect the money.

Consequently, cities, counties, highway districts, recreation districts, and other special-use districts in Idaho don’t give up anything when they don’t collect all the taxes state law allows them. Any money a local unit of government forgoes can be collected down the road, at any time. As it stands, Idaho’s taxing districts hold more than a combined $111.8 million in foregone taxes.

Local governments regularly collect less than the maximum annual tax allowed, which provides them with money for a yet-to-be-known expenditure. Local officials get to appear to be penny-pinchers. The appearance of being frugal allows local governments to earmark money in your bank account that they might one day withdraw from you, the taxpayer.

The result? Conservative officials who serve in cities and counties and other entities that budget responsibly, with no plans to collect the foregone taxes, often have their hard work eventually undone by officials who see forgone taxes as a handy way to pay for expensive pet projects. The result is massive tax increases.

To address this problem, last winter, the Legislature passed a law that says local governments could promise to forgo uncollected taxes. Now, cities, counties, and other local units of government can pass a resolution swearing forevermore that they won’t someday collect the money that they could have taken from you years ago. So, out of more than 1,000 local units of government, who took that step? Just Kootenai County and the turmoil-riddled Western Elmore Recreation District.

It’s possible some local officials aren’t aware of the new law. Pro-government lobbying organizations didn’t go out of their way to advertise it, and some local governments are controlled by people who every year spend every dollar they can. But, as for the rest? Why didn’t more local districts and more local elected officials make promises today to not ambush taxpayers with higher taxes tomorrow?

If you serve on a local government board and were part of setting this year’s budget but didn’t know that you could protect taxpayers from being hit with a huge future tax bill, contact me and I’ll walk you through the details. More than two of 1,000 local taxing districts should be protecting their constituents, the taxpayers they represent, from massive government growth and ambush property-tax increases.

If you’re an Idaho taxpayer who wants to protect your community against unforeseen, massive property tax hikes, take a moment and send this column to your local officials. Your neighbors and their wallets will thank you.

Idaho Freedom Foundation
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