Idaho House to address circuit breaker tax relief qualifications

BOISE — Idaho Rep. Charlie Shepherd, R-Pollock, introduced legislation Thursday that would help more homeowners qualify for the circuit breaker property tax relief program.

Shepherd told the House Revenue and Taxation Committee the proposal is an attempt to “fix” a bill he voted for last year, which resulted in hundreds of Idahoans being disqualified from the program.

“That didn’t work out as well as I’d hoped,” Shepherd said.

During a two-day period last May, lawmakers introduced and approved a 26-page property tax relief bill that made multiple changes in state code.

One of the changes added a new asset limitation to the circuit breaker program.

Historically, the program has provided 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.

However, in an effort to prevent people with high-value homes from receiving taxpayer subsidies, lawmakers added a new restriction last year. To qualify for the circuit breaker, applicants now can’t own a home with an assessed value greater than 125% of the county median.

That cap kicks in this year.

Shepherd said the State Tax Commission is still trying to calculate how many people will be disqualified from the program because of this change. However, it certainly amounts to hundreds statewide.

“There’s an impact in every county,” he said.

Just in Shoshone County, which he represents, 91 people who previously qualified for the circuit breaker will no longer be eligible, Shepherd said.

House Bill 481 would help most of them by raising the cap on assessed home values from 125% to 150%, or $300,000, whichever is greater.

Of the 91 Shoshone County residents who were disqualified, Shepherd said, 81 would be eligible for tax relief under the cap he’s proposing.

The bill would also be retroactive to Jan. 1.

“If we do this, the cost to the state would be about $1.1 million,” he said. “That sounds like a lot of money to me — but when we’re dealing with a $1.9 billion surplus, I think it’s an acceptable expense to help people who have lived in the state their whole life, paid taxes their whole life and who just want to stay in their homes.”

Given the wide discrepancy in home valuations across Idaho, Shepherd said there’s no way to pick a “fair” valuation cap that works for everyone.

“What’s fair in Ada County would be outrageous in Shoshone County,” he said. “So I didn’t try to be fair. I tried to be reasonable, and to me $300,000 was reasonable.”

House Majority Leader Mike Moyle, R-Star, said he was willing to introduce the bill, but he wants to shift the cost from the state to the local taxing districts.

“They’re the ones who are approving the budgets that are causing the problem,” he said. “The state doesn’t have a property tax.”

HB 481 is the second measure introduced this week to fix the tax relief bill lawmakers approved last year.

Sen. Regina Bayer, R-Meridian, introduced similar legislation Wednesday. Her proposal would increase the circuit breaker cap from 125% to 200%. It has an estimated cost of about $1 million.

Public hearings can now be held on both bills.

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