One other question I am always asked is, “Where’s all that extra money going?”

The answer is simple; there is NO extra money or “windfall,” … the current tax law caps local government budgets at 3%, WITH a growth component allowing counties to tax new construction, not yet on the tax rolls, with last year’s levy rate. Ultimately, increased property values decrease the levy rate. … BUT as we all know, such decreases can’t offset double-digit increases in property values.(emphasis mine)

In the English language, the preposition ‘but’ erases everything that was said in the previous phrase. So in effect, there IS a windfall to local governments despite the increased excemption and despite the 3% budget cap. Local governments benefit two ways – more money from current homeowners and more money on new construction because it is being assessed at the new, higher rate.

In all fairness, local governments in the Treasure Valley have put in a lot of infrastructure – sidewalks, police forces, parks, etc – that now have to be maintained. Eventually new construction income from building permits will decline and the money for the budget has to come from somewhere. If a local government plays their cards right, the extra money DOES come from increased property tax assessments. After all, an increase in property values reflect a thriving local economy. If home prices were falling, that would mean people are leaving the area or not able to afford to move-up which is bad news for any town.

Is there relief? Hopefully the levy rate will be reduced. It should be. I’m not sure I agree that the Prop-13 type of property tax system is good for Idaho. It doesn’t seem to have been good for CA. A creative solution needs to be found. Perhaps there could be a multiplier applied to the tax bill where the property owner gets a variable credit for each year that they stay in their primary residence. For instance, an elderly widow has stayed in her primary residence for 20 years. Without the adjustment, her tax bill would be $3000 a year. But she gets a credit for every year she has owned the property – say 20% which comes to $600. So her actual tax bill is $2400. If she dies or sells, the new people have to pay the $3000 a year tax bill.

Now common sense told me that a $25,000 increase in the Homeowners property tax exemption would not work because the assessor would simply keep on raising the value of your home.

Shifting the burden of supporting our schools from the homeowners/property tax to a sales tax won’t work either because you are simply shifting the tax burden , which is always borne by those in the lowest income brackets , from property tax to an increase in sales tax which makes all necessities for low-income Citizens more expensive.That is simply a continuation of a regressive tax.

Our system is supposed to be based on a progressive tax basis-That is those who make more,pay more tax. Of course during the last 20 years Idaho’s one-party system of economic elitists ( who use different party labels) have been trying to change that very American financial system.

If, as the assessor points out, the Idaho legislature did tie the exemption to increases in assessed value in the 2006 session that would help but my question there is…
Why did the legislature take 25 years to do this and how long will this last?

I think people need to take a genuine interest in who is running for office and find out what they really stand for and what they have done. Empty promises from candidates about what they WILL DO if elected are NOT enough. Look for candidates who have gotten involved and already have a proven track record outside of elected office. Then, get out and vote, not for the candidates who have the most campaign contributions from special interests, but for the ones who have the most passion for doing the right thing for the public as a whole.

Beyond that, we need to encourage all of our friends, family members and neighbors to do the same. If you are not finding candidates you want to support, then it might be necessary to take the next step and run for office yourself (which is what I’m doing) or at least seek other people to run whom you would support.

There are other ways to make a difference as well. Posting on the Boise Guardian website is a start. You can also submit letters to the editor to express your views in order to make people more aware, and put pressure on our elected officials. You can join The Common Interest and participate in expressing your opinion on issues of interest in a meaningful way. (www.thecommoninterest.org)

This past legislative session, I worked with others to organize a rally at the statehouse in order to put pressure on the Legislature and the Governor to increase the maximum value of the homeowners’ exemption from $50,000 to $100,000. There is obviously still more work to be done, since it was only raised to $75,000, and if you are willing to get involved I would love to hear from you. I can be reached by telephone at 362-0843 or by e-mail at sharonu@cableone.net

The bottom line is that if we give up and just accept that things cannot change, then they never will. We have to be willing to take action to try to make a difference. If enough people do so, progress WILL be made! If we all give up, bury our heads in the sand, and don’t take action to have better representation in government we will get what we deserve, which is about what we have right now.

Having said that, I have to disagree with him on using sales tax money to fund school maintenance and operations. I agree with Sharon – the sales tax is a regressive tax. Replacing property tax with sales tax does little to solve the tax problem.

If a sales tax increase were to replace property tax for school maintenance and operation, the legislature should require both better financial accountability and more efficient service delivery from our schools as part of the package.

Folks I know who follow local education matters tell me schools have a tendency to fly under the radar screen when it comes to both financial accountability and efficient delivery of services. Teachers, they say, are doing an excellent job of educating young minds – sometimes under difficult and trying circumstances. The problem is with board members, school administrators, and logistical support activities including transportation services. I’m told these shortcomings are well documented in budget documents and various state reports if one takes the time to look.

For those of us who itemize our tax returns, there is a second problem with this proposal. With less to deduct for property taxes both federal and state income taxes increase. The Feds win and the State wins double – both sales tax and income tax revenues increase.

Also, what impact does increasing the sales tax and lowering property taxes have on businesses? Perhaps someone can shed some light on that one.

It IS locally elected officials (city councils, county commissioners, school boards, highway district commissioners, fire district commissioners, etc), not the legislature, that determine how our property taxes are spent. As taxpayers, we need to insist these groups be proper stewards of our tax dollars.

How? Develop expertise in an area, review budget documents, form an interest group, meet face to face with elected officials, ask questions of them and their staff members, and don’t take pat answers. But, above all, be honest, respectful, and factual in your dealings. If you want to see you property taxes either stabilize or with luck go down, you need to be active in the process.

And Sharon, are you planning to offer another readers opinion to the Statesman providing an alternate view to Mr. McQuade’s recent one? Hope so.

JQP

In recent years, residential property values have increased at a much faster rate than have commercial property values. Therefore, homeowners have been taking on a skyrocketing and unfair share of the property tax burden. This is one reason why, even though there are limitations on the amount local property tax budgets can go up, homeowners have seen such an exorbitant increase. The other reason is because there are “loopholes” in those budget increase limitations.

The Legislature moved in the right direction this year when they increased the maximum value of the 50 percent homeowners’ exemption from $50,000 to $75,000. This increase resulted in a property tax “savings” of about $400 for homeowners in Ada County. Even for those people whose property taxes still went up, they went up some $400 less than they would have if the Legislature had not increased the maximum value of the homeowners’ exemption. Still, it is not enough, and for property tax equity to be achieved, the exemption MUST be increased further.

Taking school maintenance and operations (M & O) off the property tax is great, unless it results in an increase in sales tax. Sales tax is regressive. In other words, proportionately, sales tax hurts the lowest income people the most. Therefore, the Legislature ought to take the sales tax off basic necessities, such as food, particularly if the sales tax rate is ever increased again.

At the local government level, local elected officials determine property tax budgets and expenditures. They must learn to prioritize, cut the wasteful spending, and lower property taxes for us all. Wasteful spending is a burden on all property owners.

The property tax problem in Idaho can be solved, but only when both state and local elected officials ALL start taking the necessary steps to reduce the burden on property owners.

I am as frustrated with the current system as anyone, BUT I thank Mr. McQuade for his honest and candid approach. I have always found it interesting how for years property values were only reassessed every several years (seemed like six or seven years in between)but when the new valuation showed up people screamed bloody murder. They always forgot that they had been paying taxes on an old rate for 6 of the seven years…anyway, I may not like it, but I do appreciate the explanation.

My assessed value increased 19.5% and my (estimated) property taxes increased by the same 19.5% not the 3% gov’t spending growth cap Mr McQuade refers to.

Signed; confused cynic