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Long-term questions remain as Boise’s upcoming budget is looking up

Things are looking a little bit rosier than last year for the City of Boise’s budget, but there are still a number of lingering uncertainties.

Boise Budget Manager Eric Bilimoria gave a brief overview of the city’s finances heading into the 2022 fiscal year budgeting process on Tuesday. He highlighted the opportunities of additional funds and the questions of how the reopening city will fare financially. He said the city’s bottom line is expected to bounce back after the shock of the COVID-19 pandemic.

[McLean: New main library should be delayed for a few years]

“We are predicted to see recovery in our revenues as compared to the current fiscal year and fiscal year 2020,” Bilimoria said in his presentation.

Conservative spending pays off

The budget Mayor Lauren McLean directed her staff to build in 2020 was one of the most fiscally conservative budgets passed in recent years, which constituted a $34 million reduction from the year before. It kept property tax collections flat, slowed hiring and made cuts across nearly all departments while uncertainty about the economic impacts of the pandemic hit last spring.

Bilimoria said the combination of those spending holdbacks, incoming federal relief dollars and less reliance on the city’s financial reserves than expected puts the city in a strong position heading into the next budget cycle. The cutbacks will likely lead to additional funds being available at the end of the year. The city plans to start using some of the funds previously set aside for a new main library toward other projects.

[McLean: New main library should be delayed for a few years]

Boise is also set to receive $35 million from the latest COVID-19 relief package, called the American Rescue Plan, passed earlier this year. Local governments are still awaiting guidance from the federal government on exactly how the funds can be spent in the next few years, but McLean said they are looking at potential infrastructure projects. This could possibly include expanding broadband access throughout the city.

Specifics of the budget proposal, and if the city will choose to increase property tax collections up to 3% as allowed under the law, are unknown at this point in the process. The budget will be finalized in the coming months and the public will be allowed to testify at a public hearing on June 22.

Potential challenges mount

Major priorities for the city in building next year’s budget include affordable housing, addressing homelessness, climate change, transportation, accessibility and public safety, Bilimoria said.

Boise might have more cash available for projects in the coming years, but that doesn’t mean there aren’t challenges looming on the horizon.

The Idaho Legislature is still in session and no deal has come forward on property tax relief so far this session. An earlier proposal, SB 1108, sought to reduce property tax burden by capping local government budgets. It had heavy opposition from local government leaders on both sides of the aisle and died on the Senate floor by one vote. It is unknown if state officials will bring forward a new package of legislation this year and if it would further constrict local budgets.

[Explain this to me: Inside Idaho’s complicated property tax system]

This is on top of a piece of 2020 legislation that changed the property tax funding formula so Boise seeks less of the state’s overall sales tax collections than before. As residential property values shoot up, homeowners are shouldering more and more of the tax burden as compared to commercial properties. But, because the amount the city can collect stays capped and officials aren’t collecting much more to address the city’s growing needs.

And projects, like new parks and fire stations to serve the sprawling city, are only getting more expensive as Treasure Valley land gets more expensive and building costs continue to escalate.

Margaret Carmel - BoiseDev senior reporter
Margaret Carmel is a BoiseDev reporter focused on the City of Boise, housing, homelessness and growth. Contact her at [email protected] or by phone at (757)705-8066.

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