[Vision2020] Property tax cut?

Sun Jul 23 12:07:39 PDT 2006

How does this affect what Mayor Cheny wants to do?  Does this mean her 3% 
tax hike is out the window followed closely by her 9 new employees?

J  :]

>From: Ralph Nielsen <nielsen at uidaho.edu>
>To: Vision2020 at moscow.com
>Subject: [Vision2020] Property tax cut?
>Date: Sun, 23 Jul 2006 08:50:26 -0700
>
>
>ELLIOT WERK
>
>IDAHO STATE SENATE
>Legislative News
>The “Special Interest” Session
>July 16,
>2006
>                                       Volume 1, Number 6
>
>
>In This Issue
>·    The “Special Interest” Session – What’s in it For You?
>
>·    Town Hall Meeting on the Property Tax Plans – July 24th, 6:30 PM
>at Boise Public Library
>
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>The “Special Interest” Session – What’s in it For You?
>By now many of you have heard talk of a special session of the
>legislature to provide a property tax cut. The Governor has asked
>legislators to hold Friday, August 25, 2006 open in case a special
>session is called.
>
>Homeowners are rightfully asking for something to be done about
>rapidly escalating property taxes. So, if a special session of the
>legislature is called - what’s in it for you – the homeowner?
>
>To answer that question let’s take a look at the tax cut proposal
>that the Governor has laid out (both in his inaugural speech and many
>times since). Then we can talk a bit about how the proposal affects
>homeowners, and then about how the special session will work. Lastly
>I will lay out the recently announced Democratic plan that provides
>100% of the property tax relief to homeowners without raising the
>sales tax.
>
>The Governor’s Proposal - The proposal removes the school property
>tax levy (known as the M&O - $3 per $1,000 of property value) from
>all types of properties and shifts that cost (about $250 million) to
>the sales tax. This would result in a reduction of about 20% in
>property taxes for all classes of properties.
>
>That sounds pretty good. Until you look at the details.
>
>This proposal was rejected three times by the Senate in the last
>legislative session because it penalizes the people that are asking
>for the tax cut – the homeowners - while substantially weakening
>education funding. There is no tax relief for homeowners in this
>plan, just the mirage of relief.
>
>Let me explain.
>
>How the Proposal Affects Homeowners - Property taxes are calculated
>differently for residential property compared to all other types of
>property. While residential property taxes are based on full market
>value (what we can sell our house for on the market) other types of
>property (commercial, industrial, utility, and agricultural) are
>assessed based on income potential. This has led to a dramatic
>difference in property value increases over the last five years
>(really forever).
>
>For instance, while agricultural land and utility property taxes have
>actually dropped almost 10% in the last five years, residential
>property taxes have increased by almost 92%.
>
>So back to the Governor’s plan – according to Idaho Tax Commission
>figures - removing the M&O from all classes of property gives 60% or
>about $150 million of the tax cut to properties other than owner
>occupied homes (like your home that qualifies for the homeowner
>exemption). That leaves 40% of the cut for you and me.
>
>So lets recap, properties that have remained relatively flat or even
>seen a decrease in their property taxes in the last five years will
>get 60% of the tax cut while properties that have seen a 92% increase
>in property taxes get 40%. Seems a bit…unfair.
>
>And it gets even worse. We, the homeowners, pick up the lions share
>of that $250 million cost since the proposal shifts the school levy
>from property to sales taxes and business is generally exempt from
>paying sales tax (remember all those tax exemptions). If business
>properties are paying part of the school levy today and we shift to a
>tax that they do not pay (and the costs stay the same) then
>homeowners pick up that extra burden. That is how a tax cut becomes a
>tax increase for you – the homeowner.
>
>Another recap – 60% of the tax cuts go to special interests that have
>seen no substantial property tax increases over the last five years
>and homeowners see an overall increase in our tax burden as we pick
>up the full cost for school funding.
>
>But that is not all. Unfortunately there’s more.
>
>If you itemize deductions on your federal income taxes you can deduct
>your property taxes from your income. So in reality you pay your
>property taxes with 75 or 80 cent dollars (depending on your tax
>bracket). So not only will homeowners pay for a tax cut for special
>interests, but you also lose the deductibility of that portion of
>your tax burden!
>
>That is why the Senate rejected this plan three times during the
>regular session – it raises taxes on the people that need the cuts
>the most – the homeowners. And it gives a juicy tax cut to property
>classes that have not seen substantial property tax increases!
>
>If you don’t believe me you can ask Senator Hal Bunderson – chairman
>of the Senate Local Government and Taxation committee (you can
>contact him at 888-7156). After weeks of study using Idaho Tax
>Commission figures he led the charge against this plan in the regular
>session and has spoken out repeatedly against it recently in the
>Idaho Statesman.
>
>That is why I call the contemplated special legislative session a
>“Special Interest” session. It will provide tax relief only to the
>special interests – not the homeowner.
>
>How Will the “Special Interest” Session Work? – As the Governor has
>laid it out, a proposal will be worked out behind closed doors. The
>Governor will line up support for the plan prior to calling the
>“Special Interest” session - guaranteeing that he has enough votes to
>assure a quick victory. The “Special Interest” session will be called
>on a Friday (August 25th) where the only proposal considered will be
>his plan. There will be no committee hearings, no public testimony,
>and no other plans considered.
>
>The Democratic Plan – Property taxes on owner occupied homes have
>increased an average of 92% in the last five years. You need some
>relief. Our plan provides homeowners with 100% of the relief.
>
>
>The plan is simple – everyone that qualifies for the homeowner
>exemption is given an additional exemption from the school M&O levy.
>You get a 20% property tax cut and special interests get nothing. No
>shift, no complications. Just tax cuts where they are needed.
>
>The cost of our plan is $104 million which can be absorbed by our
>ongoing surplus (we currently have a $200 million fund balance – of
>that about $100 million is likely ongoing revenue we can use to fund
>property tax relief).
>
>Town Hall Meeting on the Property Tax Plans
>
>The Ada County Democratic legislators will host a Town Hall Meeting
>at 6:30 PM on Monday, July 24th at the Boise Public Library. The
>purpose of the meeting is to have a public review of both property
>tax plans and provide the opportunity for the public to discuss and
>comment on the plans.
>
>We are offering this opportunity to ensure that the public is well
>informed about the property tax plans and the ramifications of each
>plan.
>
>I hope to see you all there. You might want to arrive early since
>space is limited and we expect a large crowd.
>
>In closing I would ask you to contact your legislators to voice your
>opinion about property tax relief. Do you want to pay for a cut for
>the special interests or would you like targeted relief for
>homeowners. You can contact your legislator by name at http://
>www.legislature.idaho.gov/about/contactbyname.cfm or by district at
>http://www.legislature.idaho.gov/about/contactbydistrict.cfm. You can
>also contact the Governor (after all he is leading the charge) at
>either 334-2100 or via email at http://gov.idaho.gov/ourgov/
>contact.html.
>
>
>
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