On this 113th day of the legislative session, the House Ways & Means Committee, with no discussion or debate, just introduced a whole lot of new major legislation. Among the six bills: A new property tax relief bill from House Majority Leader Rep. Mike Moyle, R-Star, that he says is a conglomeration of a whole lot of other bills, from the Senate-killed SB 1108 to limit local government budget growth to Rep. Bruce Skaug's homeowners exemption bill to several others, but it's got lots of other stuff in it, too.
Moyle's bill is 26 pages long. He told the committee it was assembled "with the help of the counties, Farm Bureau, Association of Realtors" and others.
The giant bill would raise the homeowner's exemption from its current cap of $100,000 to $125,000, while also authorizing each taxing district to reduce its new construction roll by the amount of homeowner's exemptions above $100,000 in its district.
It would increase the Circuit Breaker property tax break for needy seniors to a maximum of $1,500; it's currently capped at $1,320 and hasn't been adjusted for inflation since 2006. But it would also boot needy seniors off the circuit-breaker program "on and after Jan. 1, 2022," if their current year's assessed value exceeds 125% of the county's median, and instead they'd be "referred to the property tax deferral program" that lawmakers already passed and that has been signed into law; that allows seniors with income up to $50,000 to have the state pick up all their property taxes through a government-sponsored reverse mortgage, with the state getting paid back with interest when the homeowner dies or sells the home.
Moyle said that's to target needy seniors with "million-dollar homes" who get the Circuit Breaker property tax break.
It would limit local government budgets to reflect just 90% of the value of new construction and annexation within the taxing district each year, rather than 100% as under current law; and would restrict local government budgets from reflecting increases from expiring urban renewal districts to just 80% of the amount that goes back on the tax rolls, rather than the current 100%.
It would also place a flat cap on local government property tax budget growth of 8%, including everything. Moyle said, "That will affect a few, but not many, districts."
The bill also would limit and cap local governments' use of "forgone" property tax revenue; under current law, when local governments don't take the full allowable 3% increase in their property tax budgets, they can essentially reserve the option to increase their budgets by that forgone amount in future years.
It would extend the current tax exemption for site improvements on land held by a developer from the point where the property development is begun to the point at which it's completed, creating a significant new property tax break for developers.
It would increase the exemption for businesses for personal property, which includes business inventory, from the current $100,000 per county to $250,000, a major tax break for the state's largest businesses, and fully exempt all personal property defined as "transient personal property," starting Jan. 1, 2022. Any taxing district created after Jan. 1, 2013 would see its state reimbursement for the personal property tax exemption limited, while any taxing district created after Jan. 1, 2022, would not be eligible for any state reimbursement.
An existing tax exemption for "operating property," such as utility lines and rail cars, also would rise from the current $100,000 cap per county to $250,000.
The bill also includes an emergency clause, making all of its provisions without other specified effective dates effective retroactively to Jan. 1, 2021.
The bill's fiscal note says its impact on local government budgets in Idaho is "hard to quantify," but says the budget limits "may result in curbed budget growth by as much as 23% in some cases." It also estimates that the bill's impact on the state general fund, largely because of the circuit breaker changes, would be a negative $2 million next year and $8.1 million each year thereafter.