Thread by @Geoffrey_Wardle

A few more thoughts on HB389 after reviewing some additional budgets for taxing districts last night #idleg

There will be a fight on the 8% cap, is it a cap on budgets, is it a cap on property tax increases for budgets? Those are not the same and the cap is poorly drafted. #idleg

Let’s assume that it is only a cap of 8% on property tax increases for budgets. #idleg

Does that really constrain the largest high growth taxing districts, i.e. cities or counties, which have had the highest property tax increases?  Not really.  #idleg

And School Districts are exempt from HB389, so the cap regardless of whatever it is does not apply to the taxing district that is usually first or second as a proportion of an individual’s property tax bill.  #idleg

But again the real impact is on smaller taxing districts.  And the legislature knows it with the exceptions they carved out for fire districts. #idleg

It is very possible that a fire district can annex property which would cause it to exceed the 8% cap, but the carve out for those districts is limited and is not ongoing. #idleg

And, again taking the example of an economic development project on the expense side that I used before, let’s look at the revenue side of the equation.  #idleg

Contrary to popular belief among those at ITD and some in the legislature, rural areas do grow, and frequently that growth is adjacent to state highways. #idleg

So the rural fire district or highway district that is called upon to make expenditures to further the economic growth decisions of adjoining cities or counties, not only have the expenditure problem I discussed previously with the cap, they have a revenue problem too. #idleg

As discussed, the value of new construction and newly annexed property are only included at 90% of their actual value.  So 90% is better than nothing, right, well no, because that increase in value is still subject to the 8% cap. #idleg

It is very plausible that a single industrial project in a small taxing district like a fire district that has predominately agricultural or residential tax base, would cause the 8% cap to be exceeded if agriculturally assessed property were to be developed as industrial.  #idleg

As an example from Ada County, a certain large manufacturing tax payer owns Parcel A, which is 60 acres, assessed in 2020 at 5.7M, immediately adjacent to Parcel B, which is also 60 acres, that was assessed at $23K.  Neither parcel has any building on it.  #idleg

Parcel C is adjacent to both and has a production building located on it, it is 12 acres. In 2012 Parcel C was assessed at $97M and in 2020 at $43M.  #idleg

Parcels A, B and C all have the same owner all have direct access to a state highway .  Difference is zoning and ag assessment and improvements. #idleg

Now, if this owner were not in Ada County, and were in a rural fire district, or a rural sewer district, or a rural drainage district, it is really easy to see how the 8% cap is unfair to existing tax payers and the taxing district. #idleg

If unimproved ag Property is $400 an Acre, and industrially zoned property is $80K an Acre, and a production facility is based upon the actual market value of the improvements, then a new, even a smaller processing facility that has a value of $20M #idleg

That $20m is going to quickly push the taxing district beyond the 8% cap due to the difference in value between Ag property and industrial property.  #idleg

Rice and Moyle did this because they are mad at Nampa, Canyon County, Boise, and Ada County.  But they didn’t even stop to think about the consequences of this on the typical taxing district in Idaho.  #idleg

Nampa, Canyon County, Boise, and Ada County will likely be fine.  The Magic Valley fire district that has to have fundraisers to fund itself because levies are defeated will not.  #idleg

But Rice and Moyle gave us “reform” in 48 hours that no one vetted no one saw and no one had the opportunity to testify about. So I guess they showed us. #idleg #GOPHatedIdaho #notmyGOP