I am sure virtually every Bannock County property owner is aware property assessments have just skyrocketed. The tax assessor’s office is swamped with confused, angry citizens.
The final amount each property owner pays in taxes in largely in the hands of the Bannock County Commissioners for county residents and city councils for municipal residents. Citizens are at the mercy of their elected officials. One can only hope these public servants understand how deeply this re-assessment will hit many hard-working citizens. One hopes they will exercise budgeting restraint. Although the property tax bill comes from the county, the largest portion of the bill for municipal dwellers is their city/town budget.
Idaho law limits how much governmental entities (taxing districts) such as cities, library districts, and fire districts can increase their revenues each year from nonvoter approved taxes (generally property taxes). It does not limit how much an individual property owners’ taxes can rise each year. Each taxing district included in the budget may increase its total nonvoter approved revenue by 3 percent over the previous year. It may also include a growth factor for annexation and new construction. The cumulative amount asked by all taxing entities determines the total property owner’s bill.
The Idaho Tax Commission site offers the following example to explain how a tax district levy rate is determined:
Selected city’s budget funded by property taxes is $8,960,868.00. The total taxable value of all property within the selected city is $1,232,686,220.00.
$8,960,868 ÷ $1,232,686,220 = .00727 city tax rate
Each applicable taxing district’s tax rate is calculated using the same procedure.
In a recent Idaho State Journal article, Bannock County Commissioner Terrel “Ned” Tovey suggested taxpayers should not worry because the levy rate will likely drop due to the 3 percent increase cap. However, it is not that simple. Even if the levy rate drops, you may very well pay more in taxes because of your increased property value. It depends on how much the levy drops.
Taxpayers whose home assessment exceeds the $100,000 homeowner’s exemption pay on every dollar beyond the exemption limit. With the average assessment higher by 25 percent, many who paid on a modest amount over $100,000 will now pay on much more.
There is no homeowner’s exemption for landlords and rental tenants.
Once again, we see the neediest among us — students, young families, the elderly, low wage earners — being hit the hardest as rental landlords pass tax increases through to their tenants.
Bannock County currently has the highest levy rate in Idaho. Dropping our levy rate so we are more in line with other Idaho counties may make our area more attractive to new businesses as Commissioner Tovey has suggested. However, it does not relieve the sudden increased financial burden on current property owners.
Many Pocatello taxpayers may be uneasy about relying on budgeting restraint from our City Council and mayor. The mayor’s Office staffing has increased steadily in recent years. Northgate will cost the city in lost property taxes for 20 years. Significant drinking water and waste treatment upgrades are needed to handle the projected Northgate growth according to the city and the Department of Environmental Quality.
The Pocatello City Council recently indicated it intends to increase next year’s budget by collecting some, or perhaps all, of the allowable 3 percent tax increase. It also indicated support for increasing the mayor’s salary by over $10,000, and voting council members a 50 percent pay raise. This follows 2018 pay raises of $5,000 for the mayor and $500 each for City Council members.
The city also has a multi-million dollar lawsuit pending. Firefighters have negotiated an understandable pay increase. Salary negotiations with the Pocatello Police Department remain contentious and unresolved.
After observing the turmoil created by the tax assessor’s recent disregard for clear advance communication and transparency, one hopes the Pocatello City Council and mayor have the good sense to hold a series of budget explanation meetings. They would be well-advised to reach out to disgruntled taxpayers through an information campaign explaining both the immediate tax squeeze and the longer-term plan to hold property taxes steady or perhaps reduce them. Skilled governance requires a long-range financial plan that mitigates against making increases in annual tax collections the norm.
There are many disturbing questions begging answers. How are taxpayers to continually pay more when their costs of living also continue to rise with no minimum wage hikes likely from the federal government or the Idaho Legislature? How are those on fixed incomes to afford ever increasing living costs and tax demands? How are poorly paid teachers to continue funding classrooms out of their own pockets and absorb ever increasing property taxes?
Elected officials with good conscience make the financial well-being of citizens a priority. How do we ensure a thoughtful long-range financial plan to guide city salary decisions? How could Pocatello transition from adversarial negotiations with siloed employee units to a more holistic interest-based process?
To date, none of the financial questions raised around Northgate have been addressed publicly. We, the taxpayers, have been committed financially by city officials who seem unable or unwilling to answer our questions. This does not bode well for financial transparency and clear answers from the Pocatello mayor and City Council around their proposed tax ask for 2020 and the longer-term property tax picture.
If we want Northgate to flourish, how do high property taxes driven by maximum-ask city budgets help? Even though the city will not realize revenue beyond the initial value of the undeveloped land for 20 years, Northgate property owners will be paying the equivalent into the TIF (Tax Incremental Finance) district to, hopefully, cover infrastructure costs.
Non-Northgate taxpayers will foot the bill for all services to that community such as road plowing/maintenance and fire/police protection. In addition, it is likely that all rate payers will share the additional costs our water, sewer, and sanitation departments incur due to the challenge of providing services in this more distant part of our city. Why would a company or homeowner choose to locate within the Pocatello city limits if we become known for high city budgets driving high property taxes?
Taxpayers have limits. We pay for services rendered — for government that is supposed to put our well-being first. We expect our officials to rigorously scrutinize every expenditure to give us the greatest value for dollar. At the moment, we might be justified in thinking we are primarily just a piggy bank!