Dirty little secret: Do citizens actually support higher property taxes?

In our 2024 Idaho Poll, a plurality of Idahoans said the property tax was the one tax that impacted their family the most. In fact, complaints about high property taxes have led the Idaho Legislature to offer relief - even though the state itself doesn't have a property tax.

The vast majority of the property tax burden comes from school districts and local governments, and that's true whether you are in Idaho, Washington or most any other state. If you want to know who is responsible for the increased burden, you may want to look in the mirror.

On the one hand, citizens complain about the ballooning rates, on the other, they vote to increase the rate with remarkable efficiency.

Consider this week's elections throughout Idaho. More than $75 million in levies from 24 school districts were on the ballot. All but two passed.

School bonds were a different story. Three Idaho districts were asking for a combined $150 million in bonds, and all three failed.

Whether the levies and bonds are justified isn't the issue. Each community will make its own decisions based on the information it is provided by the school district, local government or taxing entity.

Idaho’s property tax burden is budget-driven at the local level. There is no statewide property tax for lawmakers to reduce. With this in mind, the next step for property tax relief should be a focus on spending increases at the local level.

One idea to help with this is Truth in Taxation. To bring more transparency to property tax increases, Utah was the first to adopt Truth in Taxation in 1985. Along with Utah, Truth in Taxation currently exists in Iowa, Kansas, Nebraska, and Tennessee. Here is how the Utah Legislature describes the property tax transparency process:

“The basic concept of the system is that taxing entities may only budget the same amount of property tax each year, unless they have ‘new growth’ (not just change in value on existing properties) or go through a very public process of notifying the public and holding a public hearing on the proposed revenue increase. To achieve this, as taxable values change, the tax rate automatically adjusts to provide a constant amount of revenue. When values increase, the tax rate adjusts down to provide the taxing entity the same amount of revenue as it received in the prior year. When values decrease, the tax rate adjusts up to provide the same amount of revenue.”

Utah’s Property Tax Division further explains:

“Property Tax increases require a Truth in Taxation process of public disclosure. Taxing entities are required to follow a series of date specific steps, including notification to the county, newspaper advertisements, parcel specific notices, and a public hearing, before adopting a property tax rate above a calculated certified tax rate. The timeline is different for a fiscal year taxing entity (budget cycle July 1 to June 30) and a calendar year entity (budget cycle Jan 1 to Dec 31).”

Before moving forward with property tax increases, government officials in Utah need to first fill out a “Tax Increase Checklist” and comply with the “Tax Increase Requirements” details under Truth in Taxation.

The challenge in Idaho is how to move forward with future property tax relief that doesn’t rely on state taxpayers subsiding local spending increases. Truth in Taxation could be just what the doctor ordered for Idaho to keep the property tax burden in check.