Property tax not popular, but Boise counts on it 

Downtown Boise

Although Idaho residents don’t like the property tax and think it’s unfair, the state’s largest city relies more heavily on that tax than others of similar size to pay for its police, parks, and other services.

In a survey of ten western cities in eight states, Boise State University’s Public Policy Center found that Boise received 24 percent of its revenues from taxing business and personal property – the highest proportion of all the cities surveyed.

The property tax typically makes up 16 percent of municipal revenues in all cities around the country. The rest comes from fees, service charges, federal aid, state revenue and other taxes.

The property tax is considered a more stable revenue source than the sales tax, said Stephanie Witt, who is director of the Public Policy Center and the Social Science Research Center at Boise State.

“The downside is people just don’t like the property tax,” she said. “It’s complicated, it’s highly technical, and they fear losing their home.”

Witt and fellow researchers James Weatherby and Lisa Wennstrom compared Boise to similar-sized cities in Arizona, California, Colorado, Nevada, Oregon, Utah and Washington. They found that every year except 2001, at least one or more of the states had considered or enacted some kind of property tax limitation. Idaho has enacted a few since 2001, including in 2006, when it shifted the .3 percent general public school maintenance and operations property tax levy to the state general fund, and raised the sales tax by a penny to 6 percent.

Nationally, 38 states permit local sales taxes, although with varying degrees of leeway for the municipalities, according to the National Conference of State Legislatures.

Individual cities, including Boise, have participated for years in efforts to make other means of revenue than the property tax available to the city.

One alternative is the local option tax, a tax that is levied – with permission from the state – by cities, counties, and districts such as auditorium districts. In 1978, Idaho lawmakers gave resort cities with populations under 10,000 authority to levy local option taxes. The amount varies greatly, with Driggs adding a .5 percent tax to some sales, and Hailey adding 3 percent on vehicle rentals, hotel rooms, restaurant foods, and other purchases.

Among other things, cities use the local option tax to capture sales from out-of-town residents who might use local taxpayer-funded services such as police and fire. That is what Bieter wants to do, said Jade Riley, the mayor’s chief of staff.

Idaho cities want lawmakers to give local districts, not just the resort cities, the right to use the local option tax. Cities and counties have been working since the early 1970s to earn state legislative approval for expanding their local option taxing authority, Witt said.

But lawmakers have resisted. Some business owners and business associations oppose it too.

“It’s just a giant pain in the rear for businesses when you have a local option taxes,” said Billy Knorpp, who owns a cash register business called Direct POS and also works in Washington and Utah, where local option taxes are more common. “Local option taxes make a huge patchwork quilt of taxes that is very difficult to keep track of.”

As it is, Idaho already has more than 950 property taxes districts, said Randy Nelson, the president of the Associated Taxpayers of Idaho. Those include 44 counties, 191 cities, 113 school districts, 76 highway districts, 177 cemetery districts, 151 fire districts, three community colleges, 54 library districts, 24 ambulance districts, and 116 other districts for things like mosquito abatement, sewer, water, and pest extermination.

A local option tax “would add complexity to Idaho’s tax system,” Nelson said.

Of course, the property tax is highly unpopular as well, noted the Boise State report.

“More respondents to the Boise State University Annual Public Policy Survey choose the property tax as ‘the least fair tax” than any other tax,” the report read. “This pattern has held consistently since 2001.”

A cap that the Legislature placed on Micron Corp.’s property tax liability in 2003 costs the city of Boise about $2.8 million each year in property tax revenue, according to Adam Park, a spokesman for the mayor’s office.

Riley said the Legislature should give city residents a chance to decide, by a local vote, whether they want a local option tax that might lower their property tax burden. The last local option tax bill, which came up in the 2008 session, would have allowed the state’s 44 counties or nearly 200 cities to levy local option taxes.

“We would like to see more tools, not so we can spend more money, but balance out who pays for what,” he said.

Boise has also joined others in calling to remove costly sales tax exemptions, some of which date back decades. The city also collects user fees on many of its services.

“Like a good business person, we want to show some diversity,” Riley said. “We think there are some ways of relieving the property tax burden.”

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16 Responses to “Property tax not popular, but Boise counts on it ”

1. Eye On Boise – The Spokesman Review | Hari Loss Guide Blogs Says:
   June 14th, 2010 at 10:08 am

   [...] Idaho Business Review » Blog Archive » Property taxation not renouned … [...]

2. Bill Says:
   June 14th, 2010 at 12:40 pm

   Wow, the IBR has discovered Idaho’s notoriously regressive property taxes. Hey, isn’t it solved by getting 5.1 acres & a sprinkler hose with some bean seed, or something to that effect for our ridiculous “ag-exemption”…better yet, how about a tax-exempt “church building” every 2 blocks? And local-option, forget that, sans constitutional home-rule as the only western state without it.

   You get a “C-” for at least trying to connect the dots between the real-world economy & Idaho’s goofball politics.

3. Chuck Thomas Says:
   June 22nd, 2010 at 9:44 pm

   High Property Taxes, High Foreclosure rate & Idaho’s Forced Annexation Law created by lack of Political Ethics involving both parties…

   Proof;
   Idaho ranks 2nd from the bottom Nationwide in Ethics required to hold a Public Office. Idaho’s 2009 Legislature again rejected Ethics Reform.

   VOTING RECORDS DON’T LIE,

   Cities throughout America charge IMPACT FEES to make new-growth pay it’s own way out of ‘fairness’ to existing Taxpayers.

   The idaho Legislature & a majority of Local Government seats are occupied & controlled by Lobbyists for the Development Industry.

   Idaho Law forces Taxpayers to become unwilling partners in Developer’s Developments, by using Tax dollars to fund costly Infrastructures & Services on new Developments.

   This free-ride at Taxpayers expense explains why Idaho is also setting National records in Foreclosure Rates.

   Since 2000 Citizens for Annexation Reform has presented several Bills to replace ‘Force’ with Voting Rights, all have been voted-down or refused Hearings.
   The VOTERS GUIDE on the http://www.voteforabetteridaho.org website provides voters across Idaho with the hard facts concerning their Officials.
   The Voters Guide may be a little dated, however Idaho’s Ethical Deficit remains the same.

   If we truly want a return to Representative Government we must be willing to strictly enforce violations of Oath Of Office Contracts by our Public Servants.
   Voting Records don’t lie.
   If you belong to a Constitutional Reform Organization, start Picketing the homes & businesses of documented corrupt officials in mass. It’s legal & our obligation as Americans.
   Chuck Thomas

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