This morning the House Revenue & Taxation Committee approved AIC-opposed legislation that would restrict foregone levies for cities, counties and non-school taxing districts. House Bill 103 will likely be up for floor debate and vote in the House later this week.
Since the mid-1990s, Idaho has had a 3% Cap on annual property tax increases that limits a local government’s property tax budget increases to 3% over the highest levy of the past three years, plus growth factors for new construction and annexation.
If a local government chooses to levy less than the maximum amount permitted by law, then the foregone amounts accumulate and the local government can include these in their levy in subsequent years.
House Bill 103, sponsored by Rep. Mike Moyle, R-Star, would allow a local governing board to adopt a resolution to disclaim all or a portion of their foregone revenue.
“This bill gives local governments the ability to control their own destiny,” said Moyle. “If we truly believe in local control, we shouldn’t be afraid of this bill.”
The bill is drafted such that it’s not clear as to whether the resolution only applies to a single year’s foregone revenue or the local government’s accumulated foregone over decades. Rep. Moyle indicated in his testimony that it is his intent that the resolution would only permit the governing board to forego their foregone revenue from a single year.
Excellent testimony was provided by AIC President Brian Blad, Mayor of Pocatello and AIC Second Vice President Elaine Clegg, Council President of Boise.
“Last year the Legislature made some significant changes to foregone levies that improved the process,” said Blad. “Local governments were required to hold a public hearing and explain what the foregone levy would be used to fund.” That law improved the transparency and accountability of foregone levies, “and it should be given the opportunity to work.”
Elaine Clegg noted the fact that accumulated foregone levies total over $100 million is “real proof that the system is working. Local elected officials are choosing to tax at a low rate and are proving they are fiscally responsible.”
Clegg explained that local elected officials often don’t know what the future holds and may not understand the implications of how their decision to reject foregone revenue might impact a community decades into the future.
“The City of Meridian had a population of 3,000 in 1970. Its population is over 90,000 today. Growth of that magnitude requires a vastly different level of services. Would the elected officials of Meridian in 1970 have foreseen this extremely high level of future growth? Probably not.”