Legislative Update: February 24, 2022

This week, the City of Boise is following the progression of House Bill 648 (HB 648), which aims to put restrictions on municipal budgets by limiting access to property tax revenue in exchange for a more unstable revenue stream via sales tax funds.  

If passed, HB 648 would have an impact on all Idaho cities by making them more dependent o a less reliable revenue stream. Sales tax changes with the economy, whereas property tax is a budget-driven system that is largely immune to major fluctuations. The stability of property tax revenue helps cities maintain services levels our communities expect and deserve, including during times of economic hardship, such as a recession.  

The bill also restricts a city’s ability to fully respond to growth and the expenses that come with it. While a portion of sales tax growth is attributable to inflation, a portion of it is also attributed to population growth. As our communities grow, we need to increase our services, primarily regarding public safety. This bill would hinder a city’s ability to do so, and during extended periods of time property tax growth rates, the budget reductions would have damaging impacts to levels of city services.    

Additionally, HB 648 does not address the present reality – that the property tax problem is one of valuation, not municipal budget growth. Focusing exclusively on modest budget growth is to ignore the root cause of property tax growth for homeowners: the burden shift from commercial properties to residential properties, the fixed cap on the homeowners’ exemption and underfunded schools struggling to respond to exponential growth. 

To continue to serve our community and properly adjust our services as our city grows, the City of Boise is opposed to HB 648.  

VIEW THE PROPOSED BILL

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