Wednesday, June 16, 2004

County tax estimates shock public

Despite leaping property values, tax increases generally less

---

By MATT FURBER
Express Staff Writer

As property values in Blaine County skyrocket 15 percent countywide, many homeowners have felt significant sticker shock as they opened their annual property value assessment notice from the county.

But, although assessed property values have increased substantially in Blaine County, property tax increases are not a forgone conclusion, said Blaine County Assessor Valdi Pace.

At issue, however, is the 2004 tax estimate that accompanies each property value assessment, said Idaho state Rep. Wendy Jaquet, D-Ketchum. The estimate was calculated using 2003 levy rates for taxing districts and the January 2004 property assessment.

The practice puts pressure on the county assessor’s office because homeowners believe the estimate is accurate. However, actual taxes will not be computer figured until the end of September when taxing district budgets have been approved.

Annual municipal budget increases by law are capped at 3 percent. So, as property values increase, the portion of property taxes paid to cities by each homeowner would theoretically decrease. Budget requirements and property values dictate levy rates that’re used to calculate taxes for the county, municipalities, school, fire and cemetery districts and any bond items, such as for libraries or school construction.

For example, in Bellevue, where the existing levy rate for city taxes is .001342, the portion of the city’s 2003 budget collected from property taxes was $224,000. If the city takes the full 3 percent budget increase, and additional taxes collected from new construction this year, the budget could increase to about $237,000. Based on the city’s 2004 net taxable property valuation of $217 million, the new levy rate would be .001090. The city’s net taxable valuation in 2003 was $165 million.

For every $100,000 of valuation in 2003, property taxes paid to the city of Bellevue were $134.20. In 2004 the tax at the new levy rate based on the new valuation would be $109, a decrease of $25.20 per $100,000.

Jaquet agreed. By her own example, she noted that last year her taxes in Hulen Meadows went down $100.

Although homeowners taxes per $1000,000 are reduced as property values increase faster than city budgets, homeowners have greater home values being taxed.

This year the jump in property values is so large that by initial estimates, homeowners in Hailey and Bellevue, who are seeing property value increases of 24 and 28 percent, respectively, will likely see a city tax increase.

County Recorder Marsha Reiman this week is drawing up scenarios to help explain the phenomenon to residents as county taxing districts draw up 2004 budgets.

Using her own property as an example, Reiman said the value of her Hailey property after taking the allowable $50,000 homeowner’s exemption for a primary residence is $168,000. She said based on her office’s estimates for the 2004 Hailey city budget, her 2004 tax could be about $348 paid to Hailey. Other taxing districts were not included in her estimate, which could change throughout the budget process.

Last year the Hailey portion of Reiman’s property tax bill was $319. Her property is assessed at $218,000.

Reiman’s estimate of a $29 tax increase is less of an impact than her initial county tax estimate predicted, which was $420.30 just to the city.

She added that if her house was in Lincoln County, where the levy rate is much higher, her county tax would also be significantly higher than it is in Blaine County.

The Idaho Constitution requires that property values be assessed based on market value. Some assessors have said that most properties in the county are actually undervalued based on market demand.

In fact, Pace asked homeowners to consider whether they would sell their home for their appraised value when considering whether to protest the county figure.

"Increased valuation of your property is not making taxes go up. It’s the budgets of local government," said State Sen. Clint Stennet, D-Ketchum. "Mil rates are totally driven by how much units of government that rely on property taxes spend."

Pace said putting the estimate on annual assessments was directed by the Idaho Legislature in 2000. The intention was to prepare homeowners for what their taxes could be and to spur citizens into getting involved in the budget review process.

This year the Legislature decided that including the tax estimate was at the discretion of counties. Pace said her office would look into whether the estimate has the intended impact and should be included next year.

Jaquet said the county scenarios being worked up should go a long way toward helping homeowners understand what their taxes will be.

"The other part of this is that people should get involved in the budget process," she said. "I think $100 is a significant increase in taxes."

The schedule for taxing district budget hearings and phone numbers are listed at the bottom of the county property assessment notices.

The Idaho Mountain Express is distributed free to residents and guests throughout the Sun Valley, Idaho resort area community. Subscribers to the Idaho Mountain Express will read these stories and others in this week's issue.