Sunday, February 12, 2006

Don’t hold your breath!

Don’t hold your breath waiting for property tax relief.

The prospect of having the homeowners exemption increased and indexed for inflation has many homeowners believing that if the state legislature makes this change homeowners will get some long overdue property tax relief.

Will your property tax bill actually be smaller? Don’t hold your breath.

Increasing the homeowner’s exemption is NOT a tax cut! It is a tax shift!

The Idaho Falls Municipal Services division estimates that if the state legislature raises the homeowner’s exemption to $75,000 the city would need to raise the levy 14% just to keep the budget for 2007 at this year’s level.

The poorest homeowners could be the hardest hit. If the assessed value of your home is under $100,000 you won’t get any benefit out of the increase in the homeowner’s exemption.

That is just the beginning of the bad news. The levy rate you pay could go up dramatically. In Idaho Falls it could go up 14% or more. Your property taxes will actually increase! If your assessed value increases you will be paying even more money on top of the potential levy increase.

The year the homeowner’s exemption was first put into effect the city of Idaho Falls levy rate jumped over 20% in one year!

Homeowners may want to check with their county assessor, city budget planners and school district to see exactly how they could be affected by this proposed change.

Some questions you might want to ask are:

  1. Based on my currently assessed value and the current levy rate, what will the difference be in my tax bill if the homeowner’s exemption is raised to $75,000?
  2. What is the estimated impact on the budget of the city, county, and school district where I live?
  3. How much will city, county, and school district need to raise the property tax levy to make up for any lost revenue?
  4. Is the reduction in my property tax bill based on raising the homeowner’s exemption more, or less than the property tax increase I am facing based in increased local levy rates and increased market valuation?

To make property tax relief a reality, local taxing authorities will need to do their part by holding the line on spending and finding savings in their budgets they can pass on the local taxpayers.

I feel the same as many of you who are reading this. Property tax relief is long overdue.

Will we actually see some this year? I’m not holding my breath