GUARDIAN reader Tom Lopez sent us a rather articulate letter he had sent to Guv Butch eloquently detailing what is quickly becoming a TAX CRISES here in Idaho.
Your comments are welcome. Since the letter is long, please click on the bottom CONTINUE button to see the entire version. Tom asks readers to write their representatives and the politcos listed at the end of his letter.
Dear Governor Otter:
Explosive growth is causing many problems in Idaho. In my opinion, the most
serious problem is the rapid and uncontrolled increase in residential property taxes.
My retirement will start within the next five years and if the property tax crisis is not resolved, after nearly thirty years I may be forced to move from Boise or even the state because of the recent and uncontrolled growth in property taxes make it difficult to plan for a retirement on a fixed income.
My property taxes have increased from last year by $1,638.04 or roughly 33 percent. My house’s value (including the lot) was assessed at $324,100.00 last year and is assessed at $456,400.00 this year.
The homeowner’s exemption increase from last year makes no material difference in my tax exposure. My house was purchased in 1996 for $220,000.00. Consequently, in slightly over ten years, according to the assessor, the value has doubled. I imagine that the house could be sold for the amount of the tax value assessment and I am not attacking the assessment.
Nevertheless, my house was purchased, not as an investment, not as income property, but for a home in which I could spend my retirement years.
The increase in growth and land speculation which has infected the Treasure Valley has unquestionably driven up property values. Property is in short supply and there is no doubt that even with the current slow down in the real estate market that property values will continue to rise. The Legislature recognized this problem in 2006 but its fix did not work. Idaho needs a new fix and it needs it soon.
The property tax law as it is now formulated in the Idaho Code mixes democratic
principles and the arbitrariness of an unpredictable market. First, I am not
against paying property taxes. I recognize the need. I believe the current super
majority requirement for levying property taxes is fair because it recognizes that
although everyone can vote, only property tax owners pay property taxes. Tax
levies are basically a democratic process.
However, the tax code provisions are not democratic when it comes to the assessment process. The criteria for raising property valuations is arbitrary and tied, not to a vote, but to forces which no one can control. This problem is magnified when it comes to a person’s primary residence. This country has always placed a high value on home ownership, yet, the uncontrollable rise in property taxes on personal residences threatens this widely held value.
The tax code is also counter-intuitive and detrimentally affects homeowners and
especially young homeowners and those approaching retirement age, and even the
economy of this wonderful state that we live in.
If I live as long as my parents lived, I will have another 25 years to live. Even at a tax rate of $5,100.00 per year, that will cost me $127,500.00 to pay property taxes. That is a lot of money that will not be spent in the local economy. Of course, the property taxes will unquestionably increase and inflict an even heavier burden on what will soon be my retirement income.
As it currently stands, I must pay $425.00 property tax each month to stay in a house. While I continue to work, this a burden but it is a burden I can manage. However, how is one to plan for retirement when the burden of property taxes cannot be adequately mapped out? How will seniors pay to maintain their houses when property taxes are uncontrolled? How will young homeowners avoid financial problems when the monthly payments drastically increase due to uncontrollable growth?
It is unquestionable that under the current tax scenario at some point during my
retirement I will have to sell my house because I can no longer afford the property
tax burden. Idaho’s property tax law will drive retired people from the state.
Is this the type of state policy we want to promote? Retirees bring many benefits
to their communities. Among these benefits is the influx of Social Security and
Medicare payments which are utilized in the local economy. Perhaps one of your
staff could calculate the loss of money flowing into the state if half of the
retired homeowners sold their homes and moved to a state where property taxes
handled in a more equitable manner.
While the calculation may demonstrate that retirees are not an economic benefit to the state, I expect that the result will be otherwise. Furthermore, Idaho’s senior citizens bring social stability to our communities. They have years of experience which benefit the entire population. Senior citizens benefit the economy and our society.
I strongly urge you to start today to build a coalition to cap property tax
valuations on a person’s primary residence at the figure the person originally
bought their primary residence. In other words, my property valuation would be
capped at the $220,000.00. If someone were to buy my house now for $500,000,
that would become the new valuation.
This change will insure that Idaho will be a place where people, young and old, can live, raise families and prosper without the threat that (inevitable) growth will drive them from their communities by making the community so expensive that it is beyond their reach. It will also allow people to calculate their retirement expense with more certainty. It will also insure that market forces and not taxes shape the housing market in this state.
This is the only method which is both equitable and fair for homeowners. Property
tax levies can still occur and valuations can still increase over time through the
levies. This proposed change should be retroactive. My investment in my house can
be recovered if I sell the house and the property taxes can increase at that time.
For those of us who want to live in their house until they die, they will not
penalized because property values increase as a result of population growth.
Let’s avoid the most dire impact of uncontrollable growth and save people’s
cc: Lt. Governor Jim Risch (w/ enclosure)
Senator Mike Burkett (w/ enclosure)
Representative Nicole LeFavour (w/ enclosure)
Representative Anne Pasley-Stuart (w/ enclosure)
Commissioner Paul R. Woods (w/ enclosure)
Commissioner Rick Yzaguirre (w/ enclosure)
Commissioner Fred Tilman (w/ enclosure)
Mayor David Bieter
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