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Idaho property taxes up for debate once again in the state legislature

Idaho lawmakers set the tone early in the session with a variety of ideas on how to address rising property values and taxes.

BOISE, Idaho — At the end of the 2021 legislative session lawmakers on both sides of the aisle agreed, skyrocketing property taxes for Idahoans needed to be addressed. One area some lawmakers wanted are now keying in on, helping seniors struggling to keep up with their property taxes as their home values continue to go up.

“There are a number of solutions that we need to be advancing to solve our property tax woes,” said Assistant House Minority Leader Democrat Lauren Necochea.

Rep. Necochea says she drafted a bill to undo consequences of property tax legislation passed in 2021.

“We have major problems that was enacted last year by Republican legislators, which is that they decided to kick about 2000 seniors off of the property tax program just based on the value of their house. Many of these seniors live in modest houses, and they won't be able to receive their property tax assistance anymore unless we take action,” Necochea said.

Legislation passed last year cut down on the amount of people who are now eligible for the state’s property tax relief program. The idea behind the 2021 legislation was to prevent Idaho tax payers from paying the bill on high value homes that qualified for the assistance program. Necochea says her bill would essentially reverse consequences of 2021 legislation while also expanding eligibility for the property tax relief program, commonly called the circuit breaker.

“It deletes restrictions that prevent people from accessing it, and it increases the income eligibility up to $50,000 a year. For a family of four just to get by in the state with costs, they need to earn $60-$65,000 a year. And just to pay for the basic necessities. So, this would raise income eligibility up to $50,000 a year for family,” Necochea said.

Right now, the income eligibility only covers up to $32,230.

Nechochea’s idea comes with a price tag of about $37 million. She says the investment could greatly help people struggling with property taxes.

“My bill would triple the number of families who can get property tax reduction assistance,” Necochea said.

The property tax conversation has a lot of different angles. Republican Rep. Greg Chaney has an idea to allow Idahoans who receive the homeowner’s exemption to deduct up to half of their property tax payment from their state income taxes.

“It could effectively wipe out a lot of people's income tax liability to the state of Idaho, and it could put that money back in people's pockets. So it's essentially getting half of what you pay in property taxes back on your income taxes. Provided that you owe that much in income taxes, it wouldn't give you more than you owed,” Chaney said.

The proposed bill also would allow an income tax credit for Idaho residents for up to ten percent of property taxes paid on a rental property. Chaney says he knows some will push back on his idea because they will see it as the state bailing out local governments who aren’t controlling their budgets. Some argue that to curb the property tax issue, local governments need to scale back budgets so they don’t need as many tax payer dollars.

“The main criticism of it is it's the state budget supplementing local budgets, but really what it is, it's the state budget giving back to the taxpayer money that they've paid in,” Chaney said.

Chaney says getting creative to tackle the massive property tax topic is crucial.

“I think one of the big risks that we face is in any governing body is that we get tunnel vision and we start focusing in on one or two solutions. And when you start feeling yourself bogged down and not coming to the solutions you're looking for. I think that oftentimes that tunnel vision can be the reason why. So I think we need to stay open to all ideas,” Chaney said.

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