This morning the House Revenue & Taxation Committee voted to approve a bill that would have very negative impacts on cities’ budget authority. House Bill 283 will be considered on the House floor very soon and we ask city officials to contact their local legislators to respectfully ask them to oppose this bill.
House Bill 283 is sponsored by Rep. Janet Trujillo, R-Idaho Falls. The bill would provide that anytime property becomes exempt from property taxation after being purchased by the State of Idaho, local government tax levying authority would be reduced by an amount equal to the levy rate of the previous year multiplied by the value of the exempt property. The bill also provides that property that becomes exempt within two years may be removed from the new construction roll.
At the hearing, Rep. Trujillo dropped the bombshell that the State of Idaho is looking to purchase the Hewlett-Packard campus in Boise for the State Tax Commission, which is losing its current office space. If HB 283 passes, the fiscal impact to the City of Boise of the property being sold to the State would be a loss of over $600,000 in budget authority.
House Bill 283 will wreak havoc on local government budgets and AIC strongly opposes the legislation.
When property goes off the tax rolls after being purchased by a government entity, local governments still must provide police and fire protection, street maintenance and other vital local services.
The costs of providing these vital local government services don’t go down because property becomes exempt from taxation.
House Bill 283 will force local governments to cut other tax-supported services, or raise property taxes, to provide the services that are required for these exempt properties.
Idaho law currently does not reduce a local government’s budget capacity when properties become exempt from taxation and this is the best policy to ensure that vital services can continue to be provided without forcing cuts to services or tax increases.
We ask that city officials contact their local legislators and respectfully ask that they oppose House Bill 283.