Tomorrow the House Revenue & Taxation Committee will consider a bill that would curtail local governments’ ability to use foregone property tax levies. We urge city officials to contact their local legislators and respectfully ask for their opposition to House Bill 103.
House Bill 103 is sponsored by Rep. Mike Moyle, R-Star, and would allow the governing board of a taxing district to disclaim any or all of the entity’s accumulated foregone levies.
When a city, county, or other taxing district levies less than the maximum amount permitted by law under the 3% Cap, the foregone amounts accumulate and the taxing district can include these foregone levies in their tax levy in any subsequent year.
The concept of foregone levies has been around for decades, because it makes so much sense. Idaho taxing districts have accumulated $108 million in foregone levies (2016), which represents substantial, ongoing property tax relief for Idaho taxpayers. If the law restricts local governments’ ability to recover foregone levies, then it incentivizes levying the maximum allowed by law.
AIC opposes House Bill 103 because it puts at risk the prudent budgeting and taxing decisions that city officials have made over decades. We should be rewarding local governments that budget conservatively, not looking to tie their hands with a short-sighted policy that increases the burdens on Idaho property taxpayers.
Last session, AIC supported legislation that improved the transparency of foregone levies for local governments. House Bill 474 required that local governments provide notice before levying for foregone, including passing a resolution that identifies the amount of the foregone levy and the purpose for which the revenue will be used. This legislation provides additional transparency for local governments levying for foregone.