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Bills introduced in House, Senate to add hundreds back onto the circuit breaker

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Legislators are hoping for some changes to last year’s property tax reform bill after hearing back from local governments and constituents. 

This week, two separate bills were introduced with the aim of allowing more Idaohans back onto the circuit breaker program, which provides property tax relief for elderly, disabled and low-income homeowners out of the state general fund. Sen. Regina Bayer, R-Meridian, and Rep. Charlie Sheperd, R-Pollard, both introduced legislation in their respective tax committees to increase the value of homes residents can own to qualify for the circuit breaker program.

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Legislators introduced both pieces of legislation and they will come up for a hearing and a vote in the coming days. 

Two bills, similar ideas

This program got a shakeup during the 2021 legislative session when House Bill 389 made several changes to the property tax system. One of the compromises legislators made was to increase the maximum circuit breaker benefit from $1,320 to $1,500, but the program would instead require a means test to block anyone who lived in a home valued more than 125% of the median price in their county from participating. 

House Majority Leader Mike Moyle, R-Star, said this would prevent those living in “million-dollar homes” from using state money to pay their property taxes. He said those impacted could go to the newly revamped property tax deferral program brought by Sen. C. Scott Grow, R-Eagle. 

There are some differences between the bills. Bayer’s version would allow anyone who owns a home at 200% or below the median home price in their county to continue to receive benefits. She estimated passing the legislation would allow 1,003 people back onto the program who were about to be kicked off later this year. 

Sen. Regina Bayer, R-Meridian.

“Applicants will be taken off the circuit breaker because the value of their home has gone up through no fault of their own,” she told the committee. 

On the other hand, Sheperd’s legislation would create a threshold of $300,000 or 150% of the median assessed value for the county, whichever is higher, to participate in the program. He did not have a total number of people who would be let back onto the circuit breaker if this passed, but he said in Shoshone County there were 91 people set to be removed from the program due to the legislation. If approved, it would allow 81 of them to resume getting the assistance. 

He said it’s hard to decide what the proper number for legislation like this would be, but he said this option is the best he could come up with. He noted that in many of Idaho’s more rural counties, 125% of the median home price is not “extravagant.”

Rep. Charlie Sheperd, R-Pollock.

“The number I put on here is reasonable,” Sheperd told the committee. “If you have to sell your home and you can sell it for $300,000, you can take that and you can go reinvest somewhere in the state and buy a new home whether you want to or not. You can with $300,000. Is that fair? I can’t define fair and I’m not trying to. I am trying to be reasonable.”

House Committee asking questions

Bayer’s bill didn’t get many questions from the Senate’s Local Government and Taxation Committee, but Sheperd’s got some questions in the House Revenue and Tax Committee members. 

Moyle, one of the main architects of last year’s reform bill, said he appreciated what the bill was trying to do, but he was concerned it was having the state cover property tax bills instead of local governments. He asked Sheperd to find out if the Shoshone County Commissioners had voted to grant a hardship exemption for those who were removed from the circuit breaker instead of asking the state to keep kicking in aid. 

“I understand the problem you’re trying to solve but did you ever try to find a way that the burden of this relief is on the people causing the problem in the first place, i/e. those who set the budgets and collect the property taxes?” he said, referencing his frustration with local governments on property tax issues. “Did you look at a way to put that burden on those who are causing the problem, versus putting the burden on the state?”

Rep. Tammy Nichols, R-Middleton, also wondered if there wasn’t a bigger solution to the problem. 

“I do still feel like we’re putting on Band-Aids and throwing out bread crumbs instead of putting out real legislation that will address real tax relief for the people of Idaho,” Nichols said. “I am holding out hope we can get some real pieces of legislation in here instead of continuing with Band-Aids and breadcrumbs so I thank you for bringing this.”

‘Housekeeping bill’ on property taxes

A third piece of tax legislation introduced Thursday also sought to make some changes after last year’s HB 389. 

Sen. Jim Rice, R-Caldwell, was another major writer on the 2021 property tax legislation moved to introduce a “housekeeping bill” in the Local Government and Taxation Committee on Thursday afternoon to make some small changes. The new bill would make it clear expiring urban renewal districts were not subject to the 8% cap on property tax budgets increasing and it would change some language around foregone taxes. 

Foregone taxes are taxes local governments opted not to take in previous years, but claw back at a later date. 

“There was one taxing district that explored the idea of not taking the 3% (property tax increase allowed under code) or new construction and doing a 20% tax increase from foregone,” Rice said. “This bill closes that loophole and leaves people able to use foregone, but in a more limited way.”

The bill was introduced and specific language was not available at this time. 

Margaret Carmel - BoiseDev Sr. Reporter
Margaret Carmel - BoiseDev Sr. 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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