Photo illustration by Josh Montreuil/Press Tax bills for Kootenai County residents are due on Wednesday. Local officials say residents oftentimes are surprised at increases and encourage people to get involved in the property assessment and taxing district budget processes that result in their bills. The Treasurers Office is working on a project to provide tax information on its website so taxpayers dont have to go to individual taxing districts for such information.
| December 17, 2017 12:00 AM
COEUR d'ALENE — The tax cycle could be considered three rounds of boxing.
In that scenario, Kootenai County residents are now staggering to the final bell with Wednesday's property tax due date. Some residents are wondering what hit them — smack-dab before the holidays, of all times.
But to understand what brought on this flurry at the finish, go back to the first two rounds.
Round 1 came in May with summer plans formulating when the assessed value of properties were mailed. The values of most, but not all, properties went up based on multiple factors, including the healthy economy, comparable home sales, size, curb appeal, design style, age, structural construction materials and updates and location.
Kootenai County's total net taxable value for 2017 was $15.3 billion, about a 7 percent increase from 2016 and the fifth straight yearly hike. In recent years, the value was as low as $11.3 billion in 2012 and as high as $16.5 billion in 2007.
Round 2 hit when residents were in full summer mode. Each of the local taxing districts, including the county; city; highway, school, library and fire districts; North Idaho College; and Kootenai Emergency Medical Services finalized their budgets and held public hearings to accept citizen input on the proposals.
Some, but not all, of the districts decided to raise taxes at various levels of up to 3 percent — the maximum allowed under state law to fund expenses such as equipment, salary increases and new positions based on demands for services, morale and other reasons.
The first two rounds are what led to Round 3. Notices arrived in the mail last month in form of a tax bill, a compilation of the decisions from the taxing districts and property value that's handled by multiple county departments and wrapped into one tidy package during the holiday season.
"It all plays together," said Rich Houser, Kootenai County's chief deputy assessor.
"Taxing entities create a budget that they submit to the county auditor. We develop our assessment as of Jan. 1 using the prior year's sales. Total budget divided by net taxable assessed value (the market value minus exemptions) equals the levy rate. The auditor compiles this data and forwards it to the treasurer, who sends out the bills."
For some residents, including Athol's Stephanie Gossard, the tax bill packed a punch. Hers went up about $1,000, including $400 for a school increase she said she didn't see coming when a funding measure was approved earlier this year.
"Being a senior on a limited income, (government agencies are) taxing us right out of home ownership, something we have worked hard for all our lives," she said. "Our area is booming with new residents, homes and businesses. (The agencies) should really have no need for raising taxes with the amount of new revenue coming in. Homeowners need to stand and say enough is enough.
"Kootenai County needs to remember that the retired community is a huge part of what keeps this area thriving. Do you really want that to go away by breaking us financially?"
Kootenai County Assessor Mike McDowell said he thinks residents can be misled when the districts claim they're not increasing tax rates when funding measures are proposed. Residents are shocked when their tax bills arrive in November with hikes.
"We hear this a lot, and it couldn't be more misleading," McDowell said. "Ultimately, (the districts) don't have any control over the tax rates. That, by law, is determined by the county auditor by taking the total budget and dividing that by the net taxable value of all properties in that jurisdiction.
"The only thing that the districts have control over is their budget. The budget then drives what the levy rate will be. It's disingenuous to tell people that they'll have the same levy rate, then charge people more tax dollars."
The Assessor's Office is required to revalue or physically inspect 1/20th, or 5 percent, of the county's properties at least once every five years. The rest of the properties are adjusted through analysis and trending. Residents can appeal their assessment to the county commissioners, acting as the Board of Equalization, in June.
"When you receive your assessment notice, ask yourself, 'Would I sell my property for what it’s assessed at?'" Houser said. "If the answer is, 'No, I would sell it for more,' then I think we are OK with the assessed value. If the answer is, 'No, it's overvalued and I would sell it for less,' then come talk to us.
"We can show you our sales data and property characteristics that we have on your property. It's at that time we can adjust your value if warranted."
Factors that don't determine an assessed value, but people believe do, include possible future changes in your neighborhood or a perceived bad neighbor.
When the county treasurer, as the tax collector, sends out the tax bill, it takes the tax rate multiplied by each property's net taxable value and that determines how much each property owner owes to each taxing district. The tax bill consists of all taxes owed to the districts in a homeowner's jurisdiction.
Houser said residents' frustrations at the end of the tax cycle might be averted if they'd gotten involved in either the assessment appeal or budget processes.
"Attend budget hearings and ask questions such as, 'Do we really need a new bus?'" Houser said. "When you're standing in line to pay your taxes, it's kind of too late."
THE SWIMSUIT STORY
Most taxing districts hold budget workshops before the public hearing. That's when decisions are made by staff and board members to shape the proposed budget.
"The public needs to be informed about the discussion," McDowell said. "(Taxing district boards) are hearing 10 to 1 that better streets and police service are needed, but that better service also equals the need for more tax dollars. There's not a lot of people asking, 'Watch my wallet.' If someone doesn't want their taxes to go up, they need to think about which services they want to reduce or get rid of. Bigger budgets mean more taxes."
The dates and times of the budget hearings are included on the assessment notices along with the phone numbers for the taxing districts. Such information is also required by law to be posted in the Legals section of The Press. Proposed budgets are available at the offices of the taxing districts for the public to view and some are posted online.
Government officials are the first to admit most budget hearings draw sparse, if any, crowds. The number of staff members generally outnumbers citizens at large.
McDowell, a former Coeur d'Alene City Council member, remembers one summer when the board debated the merits of a bathing suit ordinance. The hot topic: If there should be restrictions on how small bathing suits could be in public areas after a man sunbathing in a thong spooked Campfire girls who were on a cruise.
"The proposed ordinance was defeated in a packed room — the fire marshal even had to limit how many people to let in — and the council called a short recess to cool off before the budget hearing," McDowell said. "Those in attendance were encouraged to not go away because there was a proposed $35 million budget coming up, but when the meeting resumed there were only three people left (all city staff members)."
Houser said some residents, especially with the influx of new citizens, have been upset that they did not receive the homeowners' or timber exemption that reduces the taxable value of property. In some cases, that's because the resident didn't file for it or meet the deadline.
"At closing, the title company will tell (the property owner) to talk to the assessor about the exemption, but they don't come in to file it," Houser said. "Or, sometimes they'll file for it, but after the (April 15) deadline. If it's filed after April 15, the exemption is good for the following year, but not the current year."
HELP ON ITS WAY
County Treasurer Steve Matheson said his office fields many tax questions each December because it is the department that sends the bills. When residents ask why their taxes went up — the most common question his office fields — they are generally asked to contact the individual taxing districts that increased their budgets.
"My office is simply the billing agent for the various taxing authorities," Matheson said. "We are simply the messenger. The components used to generate the tax bills (property values, exemptions and levy rates) are not under my office's control."
Matheson said the homeowners' exemption, which was changed by the Legislature two years ago and is 50 percent of a home's value up to a maximum of $100,000, has caused other questions since it has had an impact on taxes.
Market conditions seem to also have thrown some taxpayers off this year, he said.
"Most taxpayers expect when market values go up, levies go down, but that didn't happen because several taxing authorities had increases this year," Matheson said.
Matheson said his office recognizes that residents have tax frustrations, so Chief Deputy Treasurer Laurie Thomas is leading an initiative to update the treasurer's website to include information that currently is not easily accessible to taxpayers.
Such information will include: taxing authority's budget hearings, contact information, all voter-approved bonds outstanding, the current year's budget, audited financial statements, worksheets used to calculate levy rates and historical data.
Taxpayers currently must contact each taxing authority to obtain basic information and that can be a time-consuming headache, Matheson said.
"The idea of the website will be to provide enough information in one location to allow taxpayers to more easily determine exactly why their property taxes are higher," he said.