The legislative session has begun, and Meridian executives hope lawmakers will address two growth-related issues: property taxes and schools.
Treasure Valley’s population has grown significantly over the past two decades, as have property assessments and individual property taxes. Last year, lawmakers passed HB 389, which limits the total growth of a city’s property tax budget to 8% per year.
The bill was widely criticized by city and county officials in the state.
“The 2021 legislative session has been very trying for cities in Idaho, including Meridian,” Mayor Robert Simison wrote in a letter to Gov. Brad Little last fall. “It is clear that HB 389 was not a sound policy or a practical solution to the property tax problems facing Idahoans.”
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Along with the letter to Little, Meridian officials attached a bill for consideration, including a proposal to repeal HB 389. In a discussion of the repeal, the letter stated that HB 389 “was a failure of the due process of the Idaho Legislature”.
The city has also suggested developing a split levy system to separate residential and commercial properties from each other, and adopting an exemption for homeowners with an escalation provision.
Until 2016, Idaho indexed the exemption to home values. The Legislature then removed the indexation and capped the exemption at the request of the Idaho Association of Realtors,the Idaho Press previously reported.
Simison also suggested resetting circuit breaker provisions, which provide tax relief to low-income seniors and residents with disabilities, and which HB 389 limited.
This year, the state’s budget surplus is about $1.9 billion, which Simison says could be used to pay down the school district’s bond debt.
“Idaho is well positioned to provide meaningful and real relief,” Simison wrote.
Schools are a significant issue in the rapidly growing Meridian area, which makes up much of the West Ada School District.
In November, West Ada School Board President Amy Johnson testified before the Meridian City Council about the extent of overcrowding.
Johnson, who did not represent the board, warned that Meridian and the West Ada School District would suffer “a significant amount of pain” if leaders could not figure out how to manage growth and fund schools,the Idaho Press previously reported.
At the time, Councilor Luke Cavener and Councilor Liz Strader said the schools problem made it difficult to support residential projects in South Meridian without a plan for the area.
Simison wrote in his letter that the Legislative Assembly should consider how impact fees could be used for capital expenditures, an idea echoed by some Meridian City Council members.
Impact fees for building new schools could contribute to overcrowding, Councilman Joe Borton told The Idaho Press. The city council is in a difficult situation because there is a housing crisis, but the capacity of schools is not unlimited, said Borton.
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“These are the discussions you need to have. What if no new school is built? Borton said. “If that resource runs out, the ability to expand and develop our schools, are we going to do something different?”
Councilor Treg Bernt said he reviews each residential application on a case-by-case basis.
School impact fees could help pay property taxes, since West Ada bonds are a portion of property taxes, he said.
“I hope that in the future, in the next legislative session, they will listen and come up with something that will actually create less property taxes,” Bernt said. “And help with the burden our citizens face.”