Latah County commissioners on Monday rejected $1.9 million in state initiative funding — which would have provided property tax relief to local taxpayers — because they felt accepting the money would be too risky.
All three commissioners voted to decline to participate in Gov. Brad Little’s Public Safety Initiative Grant based on “legal advice and financial consultation,” according to Commission chairman Tom Lamar’s motion.
The initiative, which utilizes federal Coronavirus, Aid, Relief and Economic Security (CARES) Act funds, would provide funding for public safety payroll expenses to city and county governments that agreed to participate in the initiative, and further agreed to provide the resulting savings as property tax relief to the taxpayers of the participating local governments by foregoing the taxes that would otherwise traditionally have been collected.
The motion states that opting into the program carries a high risk that the $1.9 million in funds would be demanded back for several reasons.
It said conflict remains between departments of the U.S. Treasury as to what the CARES Act funds can be used for and how the presumption of covering public safety payroll costs will be interpreted and audited; the issue of whether Little’s initiative violates the U.S. Treasury prohibition on using the funds for revenue replacement has yet to be addressed; a lawsuit is pending on Little’s program which could invalidate the program; and the language of the CARES Act does not appear to authorize Little’s program.
Lamar said he and local officials have been asking the state and federal governments about the legality and parameters the state has placed on the funds, but they have not received assurance that the state program would be legally accepted by the federal government.
He said the initiative sounds good on its face, but the conditions Congress and the state of Idaho placed on how the money can be spent were problematic to Lamar and county prosecutors, clerks and treasurers across the state.
“We are not willing to put Latah County’s finances at risk to take that money,” Lamar said.He said the property tax relief would have been minimal for small residential taxpayers and larger for big commercial property taxpayers, so it would not help the people most at need, Lamar said.
“Even on a tax relief perspective, it doesn’t really do what needs to be done,” he said.As part of Lamar’s motion, the commissioners approved the fiscal 2021 L-2 property tax certification. The property tax budget for fiscal 2021, which starts Oct. 1, will be $10,702,186, an increase of $137,493 from the existing budget.
Latah County property taxes have increased at the maximum allowable 3 percent each of the past four years but the new budget calls for no property tax increase except for new construction value.
The city of Moscow is expected to accept the $1.6 million — per the Moscow City Council’s direction — it was allocated as part of Little’s program. The city’s L-2 must be submitted to the county by Monday.
Garrett Cabeza can be reached at (208) 883-4631, or by email to firstname.lastname@example.org.