The legislative session has started, and Meridian leaders are hoping lawmakers address two issues associated with growth: Property taxes and schools.
The Treasure Valley population has grown significantly in the past two decades and so have property valuations and individual property taxes. Last year, legislators passed HB 389, which limits total growth in a city’s property tax budget to 8% a year.
The bill has been widely criticized by city and county officials in the state.
“The 2021 legislative session was a very trying one for Idaho cities, including Meridian,” Mayor Robert Simison wrote in a letter to Gov. Brad Little last fall. “It is clear that HB 389 was not sound policy or a practical solution to the property tax issues that Idahoans are facing.”
With the letter to Little, the Meridian officials enclosed some draft legislation for consideration, including a proposal to repeal HB 389. In a discussion of the repeal, the letter said HB 389 “was a failure of due process of the Idaho Legislature.”
The city also suggested developing a split levy system to separate residential and commercial property from each other, and enacting a homeowner’s exemption with an indexing provision.
Until 2016, Idaho indexed the exemption to home values. The Legislature then removed the indexing and capped the exemption at the urging of the Idaho Association of Realtors, the Idaho Press previously reported.
Simison also suggested resetting circuit breaker provisions, which provide a tax break for low-income seniors and disabled residents, and which HB 389 limited.
This year, the state’s budget surplus is around $1.9 billion, which Simison suggested could go toward paying off school district bond debt.
“Idaho is well-positioned to provide meaningful and real relief,” Simison wrote.
Schools are an important issue in fast-growing Meridian, which makes up much of the West Ada School District.
In November, West Ada School Board Chair Amy Johnson testified to the Meridian City Council about the extent of overcrowding.
Johnson, who was not representing the board, warned both Meridian and the West Ada School District will experience “a significant amount of pain” if leaders can’t figure out how to manage growth and fund schools, the Idaho Press previously reported.
At the time, Councilman Luke Cavener and Councilwoman Liz Strader said the schools issue makes it hard to support residential projects in south Meridian without a plan for the area.
Simison wrote in his letter that the Legislature should evaluate how impact fees could be used for capital expenditures, an idea some Meridian City Council members echoed.
Impact fees for new school construction could help with overcrowding, Councilman Joe Borton told the Idaho Press. The city council is in a tough spot because there is a housing crisis, but also school capacity is not unlimited, Borton said.
“Those are the discussions you have to have. What if no new schools get built?” Borton said. “If that resource runs out, the ability to expand and grow our schools, are we going to do anything different?”
Councilman Treg Bernt said he looks at each residential application on a case-by-case basis.
School impact fees could help with property taxes, since West Ada bonds make up a portion of property taxes, he said.
“Hopefully going forward, this next legislative session, they’ll listen and craft something that will actually create less property taxes,” Bernt said. “And help with the burden that our citizens are facing.”