Taxes main dish at lunch with legislators

Last week's luncheon didn't unleash any legislative revelations, but it did provide some clues about what likely lies ahead in the 2021 session.

You know, hot button stuff like property taxes and health district responsibilities.

The luncheon between Kootenai County officials and legislators from our area was missing Sen. Mary Souza and Rep. Paul Amador. However, the other legislators were there, as were the following county officials: all three commissioners, Sheriff Ben Wolfinger, and Prosecuting Attorney Barry McHugh among others.

On property taxes, the commissioners recently sat in on a call coordinated by the Idaho Association of Counties about the prospect of property tax legislation in the upcoming session. During that meeting, which invited county commissioners from around the state, a proposed 5% property tax cap dominated the discussion.

The 5% cap would be reached by combining new growth, forgone balance increases, and the Consumer Price Index (CPI) valuations. Counties and local taxing authorities now are allowed a property tax uptick of up to 3% every year, not including CPI's or new growth.

In general, property taxes have been a popular topic for state lawmakers in recent years but failed to make any headway during the 2020 session. While taxes are undoubtedly a burden for Idahoans, Commissioner Chris Fillios pointed out that the state itself reports one of the country's lowest rates.

"I don't believe we have a property tax issue in the state of Idaho," he said. "We're ranked fourth from the bottom in property taxes. The issue of people of fixed incomes and the difficulties they face, I get it, but that's everywhere. That's every state in this nation."

During Rep. Jim Addis's property tax working group, Fillios also said there was a conversation about a "rolling five" property tax concept. This style of taxation assessment would review five years of taxes to determine an appropriate rate for any given year, Fillios said. Creating this moving average for property owners would avoid unexpected large increases caused by the re-evaluation of county properties performed every five years.

However, the commissioners expressed concern about decreasing property tax revenue because the county relies on income to pay employees — who have been historically underpaid, they said.

"If you limit our taxing authority, you're going to hurt us," Fillios said. "Some of the examples we brought up was the turnover of employees. David Callahan's group (the Kootenai County Community Development Department) has a 23% turnover. These people are not easily replaced. They're highly skilled, and they're not very easy to keep a hold of. We're simply just not competitive."

Briefly touched on was an alternative that would benefit counties heavily dependent on tourism, like Kootenai County. This option would spread the tax load to a broader base and place a more significant burden on those who own vacation homes in the area, Fillios said.

Commissioner Leslie Duncan also proposed to the legislators the restructure of impact fees to offset some of the county's property tax burden. Impact fees, which typically apply more to municipalities than counties because of schools, parks, and structural domains, would be expanded through Duncan's idea to aid county development.

"It goes back to the growth issues," Fillios said. "If you want growth to pay for itself, and I'm not sure it ever will, if we can assess these impact fees and do it on a more aggressive schedule, it will greatly benefit the counties."

During the luncheon, Fillios said Sen. Steve Vick mentioned modifying the power of health district boards to remove the ability to enforce medical mandates. Instead, Vick proposed placing the authority with county commissioners. Currently, the county has no power to issue an order on residents unless they are on county property, such as the courthouse.

Another argument the county commissioners have faced this year mentioned by the lawmakers was appointing versus electing health district board members, Fillios said. The Panhandle Health District board, which presides over and is contributed to by Kootenai County, is presently appointed. Fillios said he, for one, is not in any rush to change the board.

"When you have elected officials, you, by definition, politicize the process," Fillios said. "I believe that having medical professionals such as Jai Nelson and Dr. McLandress is an asset. If you read the statute, it says if there is no medical professional, there should be someone with demonstrated knowledge or affection for public health."