Idaho Senate overrides the governor and delivers property tax relief.

The Idaho Senate last week had a tremendous opportunity and seized the day. This year it was the Republicans in the Legislature that drove an effort to ease the burden of property tax for all Idahoans.

I sponsored two bills at the start of the session related to property tax. The first would have fixed the circuit breaker and would have raised the homeowner’s exemption. That tax shift was to re-balance the property tax burden between homeowners and commercial, agricultural and industrial property owners. The second bill was my preferred strategy and would use the state’s budget surplus to pay a portion of our property tax. The result would be a true decrease of our overall tax burden.

It was this second strategy that ultimately got adopted into House Bill 292 (H292). Property tax relief was entirely driven by the Legislature and was not an initiative of the governor. H292 passed the Legislature in an overwhelming bi-partisan vote, and it was a surprise this week when the governor vetoed the bill. He claimed it was because of a flaw that affected transportation bonds, but a veto was not necessary since that could be fixed with a trailer bill.

After the veto, the Legislature played some chess, and the House and Senate Republicans almost unanimously overrode the governor’s veto for the first time since 2007. The Democrats opposed the override which would have left Idaho’s property taxpayers empty-handed.

Now that the Legislature’s Republicans delivered this victory in H292, how much will your property taxes go down? If you are an owner-occupied home who enjoys the homeowner’s exemption, then H292 will deliver you property tax relief in two ways. First, it will use sales taxes that you paid to the state to pay a portion of your property tax bill. In 2023 homeowners will see a direct reduction of their property tax bills of about $140 million. We should see an average 19.2% reduction in our property taxes as a result.

Another benefit to homeowners and all other property taxpayers, H292 will deliver relief by providing funding for school bonds, levies and new school facilities bonds. In 2023, this will mean an additional relief in property taxes of $65 million. That relief will go up to $170 million in 2024 and $216 million in 2025.

Theoretically, H292 will reduce the amount of money that public schools need to ask from voters in the form of local property taxes. Currently, schools receive $600 million of their funding from these taxes. H292 will provide over a third of that funding relief by 2025.