Part I
Guest opinion by SARAH MICHAEL
Chair, Blaine County Board of Commissioners
On Aug. 10, the Idaho Legislative Interim Committee on Property Taxation will be visiting Blaine County to solicit views from residents about property taxes .... "the tax that Blaine County homeowners love to hate." When I first heard that an the Interim Committee was coming to hear from us, I had renewed optimism that working with the Idaho Legislature, residents and local officials, we might find reasonable solutions towards the growing property tax problem.
I became concerned, however, when I learned that one legislative proposal is to eliminate local government's ability to tax new development. In a high growth county, we need more tools to make growth pay for itself, not fewer. When you analyze Idaho's property and general tax system, current homeowners and residents pay for the majority of new development. Although you see property values go up, the current national pastime of speculating in the real estate market doesn't help pay for essential services. Just look at the City of Bellevue, property values have tripled, new houses are being built, and it still has no way to fund a fire department.
Idaho should follow other states that allow local governments to capture some of the costs of new development through meaningful impact fees. When you consider that it costs more than $5,000 to educate a student and $35,000 to hire a police or sheriff officer, adding new residents and students strain local budgets. In Idaho, local government and school districts can't levy impact fees on new development to help pay for new schools, teachers, emergency service personnel, or other big ticket items. In fact, counties can't levy taxes upon new agricultural subdivision lots until after building occurs. Idaho's tax codes guarantee that real estate speculators and new development virtually get a free ride. Across the state, you read about school districts, cities, counties, and ambulance districts, asking current property tax payers to vote for increased property taxes to meet their budgets. In fact, existing residents pay twice: first, by seeing their quality of life impacted, and then having services reduced unless they pay more. This is one of the reasons you should appreciate local elected officials who seriously scrutinize new subdivisions and annexations.
We want to welcome new residents. They bring new energy, businesses, ideas, volunteers, and workers to our communities but new development needs to pay its fair share. Besides meaningful impact fees on new growth, other states allow real estate transfer taxes to replace property taxes and fund local services. Real estate transfer taxes can help to pay for public transportation, recreational programs, and affordable workforce housing.
Idaho should also follow other states in allowing counties to have a county local option sales tax to help pay for public services. In speaking to one official from New Mexico, local governments use local sales taxes to fund local government and schools. The state has 5% and local governments may add another 3%. In Aspen and Jackson, their local option sales tax covers the cost of many programs currently funded in Blaine County by the property tax payers. Since Blaine County's population swells by more than 30% during peak seasons, having visitors pay a share makes good sense.
Next: Part II—Solutions to the Property Tax Problem in the Friday edition of the Mountain Express.
