Latah County opts in to property tax relief plan

The Latah County commissioners on Wednesday agreed to join the growing list of cities and counties that may take part in Gov. Brad Little’s $200 million property tax relief plan.

The commissioners approved a letter of interest expressing qualified support for the program, which would allocate as much as $200 million in federal coronavirus relief funds to local government entities to pay the salaries and benefits for their public health and public safety staff incurred between March 1 and Dec. 30.

To qualify for the payments, cities and counties must pass the savings along to taxpayers by reducing their fiscal 2021 property tax levies an equivalent amount.

They also have to freeze 2021 property tax collections, meaning they couldn’t take any part of the standard 3 percent increase in property tax revenues or tap any forgone taxes banked in previous years. The only allowable increase in 2021 property tax revenues would be for new construction and annexations.

As is the case in other cities and counties across the state, Latah County officials question the legality of the proposal.

The $200 million would come from Idaho’s share of the Coronavirus Aid, Relief and Economic Security Act, which Congress passed in March.

As initially approved, the act prohibits state and local governments from using the money to replace lost revenues — or to pay for expenses already budgeted before the coronavirus reached pandemic levels.

“I’ve read through the CARES Act over and over, and I still have major concerns about the legality (of the governor’s proposal),” said Latah Commissioner Kathie LaFortune. “But what we’re doing today is just signing a letter of interest. It doesn’t bind us to do anything or to take any money.”

The letter clearly notes that, if the commissioners accept the money and it’s later determined this wasn’t an approved use of the funds, the county isn’t on the hook for any repayments.

“As a condition of our participation in the program, in the event the U.S. Treasury requests repayment of these funds … Latah County understands that the state of Idaho will hold us harmless,” the letter notes. “Latah County expressly declines to refund, defend, indemnify or hold harmless the state relating to the provision of these funds.”

Commissioner Dave McGraw said Latah County is doing the right thing by sending the letter.

“It expresses our interest but doesn’t commit us to anything,” McGraw said.

Little unveiled the tax relief plan in June, based on a recommendation from his Coronavirus Financial Advisory Committee. The deadline to apply for the program is Friday at 5 p.m. MDT.

As of Wednesday, letters of intent have been received from 25 cities and 10 counties, including Idaho and Clearwater counties.

After the deadline passes, the state will determine how much of the $200 million each city and county would receive. The distribution depends on how many local governments decide to participate in the program, as well as their population levels and estimated payroll expenses.

Depending on how that analysis works out, Commissioner Tom Lamar said Latah County could be in line to receive about $4.5 million.

“We look forward to receipt of an estimated payroll allocation available through the Coronavirus Relief Fund by Aug. 3, so we can properly assess whether this is in the best interests of the citizens of Latah County and accurately prepare and publish the upcoming (fiscal 2021 budget),” the commissioners noted in their letter to the state.

The Moscow City Council also agreed to submit a letter of interest to the state, although, like Latah County, they have questions about the legality of the program and how it will be implemented.

William L. Spence may be contacted at bspence@lmtribune.com or (208)-791-9168.