Bill making changes to property tax relief plan moves to House

BOISE — A plan to keep elderly and low-income Idahoans from being booted off a local property tax relief program advanced to the House floor Wednesday.

House Bill 481 is a response to changes lawmakers made in the circuit breaker program last year.

“The reason for this legislation is to try and help some residents who are on fixed incomes, who had this tax break factored into (their budgets) and who now, with us changing the rules last year, can’t pay their taxes,” said Rep. Charlie Shepherd, R-Pollock, who sponsored the bill. “I’m trying to help these people out to the best of my ability.”

The circuit breaker program provides as much as $1,500 in annual property tax relief for the elderly and disabled, as well as for individuals who earn less than about $32,000 per year.

In 2021, the Legislature added a new assessed value cap to the program, denying eligibility for anyone whose home has a value greater than 125% of the county median.

The intent was to prevent people who own expensive homes from qualifying for a taxpayer subsidy.

In practice, however, the asset cap will likely disqualify hundreds, if not thousands, of elderly and low-income Idahoans from the circuit breaker program.

HB 481 would increase the cap to $300,000 or 150% of the county median, whichever is greater.

Shoshone County Assessor Jerry White told the House Revenue and Taxation Committee that would benefit a majority of homeowners who might otherwise be disqualified from the program.

In Shoshone County alone, he said, 91 homeowners would be disqualified if the 125% cap remains in place.

“I know most of these people,” White said. “These are very proud people, the heart of the community. Most of them won’t be in their homes if they have to pay property tax. They just can’t do it; they’re living on less than $32,000 per year.”

He mentioned one woman who stops taking her medications in the winter months so she can afford to pay her heating bill.

“This (circuit breaker) program is the most positive thing we can offer our senior citizens,” White said. “I’ve had them cry when they find out they qualify.”

Last year, 647 Shoshone County residents qualified for the circuit breaker, he said. Increasing the assessed value cap to 150% or $300,000 would maintain eligibility for all but about 10 of them.

“In our area, we’re looking at 50% to 70% increases in our real estate values,” White said. “We’re very close to Coeur d’Alene. People are being priced out there, so they’re coming to our area, buying homes and raising values. For the recipients of the circuit breaker, it’s not their fault these values are skyrocketing.”

House Majority Leader Mike Moyle, R-Star, noted that homeowners already have an ability to defer taxes on their property until they sell the home or die. County commissioners can also forgo collecting the tax by approving hardship exemptions.

The circuit breaker, by contrast, is paid for by state sales tax collections.

“I think the reason there’s a push for this bill is because (local governments) want general fund dollars to be used to fix the problem, rather than their own funds,” Moyle said. “If we get to the point we keep subsidizing and sending more general fund money back to the locals, there will be more and more of a push (for the Legislature) to control their budgets. I don’t think that’s what we want.”

Rep. Tammy Nichols, R-Middleton, had a different reaction.

Given the state’s burgeoning tax collections, she said the $1.1 million estimated fiscal impact of HB 481 was a pittance.

“I’m a little disappointed we’re only offering $1 million in relief with this bill,” Nichols said. “I still think that’s kind of breadcrumbs for the taxpayers of Idaho.”

Despite their concerns, Moyle and Nichols joined the remainder of the committee in sending HB 481 to the House floor with a favorable recommendation.

A similar bill the increased the assessed value cap to 200% of the county median passed the Senate Local Government and Taxation Committee earlier this week and awaits action by the full Senate

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