It turns out the Ada County Highway District will consider an even lower foregone tax amount than previously announced.
Last month, ACHD staff brought back new numbers on the amount of foregone taxes the entity could take after receiving clarified guidance from the Idaho Tax Commission. In July, the commission signaled support to consider $7.5 million in foregone, but now the commission is only considering taking $1.6 million, plus a 3% tax increase and revenue from new construction.
Foregone taxes are property taxes that agencies decided not to take in previous years but are allowed to claw back later if they choose. It is a one-time tax increase, not a recurring one like the 3% or new construction allowable under code.
Navigating new tax policy leads to changes
This has been an uncertain budget year for local governments across Idaho. Budget managers tried to sort through the impacts of the sweeping HB 389 tax reform bill passed in the waning days of the record-breaking lengthy legislative session. Initially, ACHD Budget Coordinator Christine Tannler thought the bill allowed the agency to calculate the amount of foregone it could take based on ACHD’s full budget of $126 million. But instead, it only allowed it to calculate the percentage based on the $42 million in the budget from property taxes.
This means the highest amount of property tax increase the ACHD commissioners can approve at its public hearing on August 25th is $1.2 million in revenue from taking a 3% collection increase, $1.2 million from new construction revenue, and $1.6 million in foregone. The foregone amount would go toward maintenance and operations costs and capital projects.
If ACHD adopts this amount, it will increase the property tax cost on an average home $27.
May calls for more budget meetings meetings
ACHD’s proposed budget has gone through several iterations, with staff initially proposing an option with $10 million in foregone to the commission. However, due to a lack of a quorum, commissioners did not have a chance to discuss the budget altogether until the end of July. This, on top of the change in the tax law, led to several changes in what the agency is considering.
Commissioner Mary May said at the July 28th meeting she hopes the commissioners will start budget discussions earlier next year and prioritize more work sessions so officials can all get on the same page earlier.
“I’d like to start as soon as possible where we’re having commissioner discussions and sit at the table so we’re looking at one another and we have more communication going here,” she told staff. “But here it’s just kind of like we’re being presented to and we’re asking the questions, but we want to get a little more involved in the whole budget.”