The $838,000 tax goof

Kootenai County residents will have “a little extra under the tree” for the next two years after officials discovered an error in the Idaho State Tax Commission’s 2022 tax levy forms. 

The computational error was primarily caused by House Bill 389, according to a Tuesday news release from Kootenai County Auditor Dena Darrow. 

Idaho legislators approved HB 389 earlier this year to provide residents with property tax relief. The bill was controversial because it limited taxing districts, like counties and cities, from increasing annual budgets by more than 8%.

“The result of this error is the county will collect $837,768 fewer taxes than approved for the 2022 fiscal year budget in the general fund,” the release says.

Kootenai County commissioners approved the fiscal year 2022 budget with a 3% tax increase plus new growth revenue in late August. However, the state error “effectively reduces the 3% to 1.4%,” Darrow wrote in the release. 

Commissioners voted Tuesday to redirect the uncollected 1.6% property tax increase into the forgone balance. Once allocated, the Kootenai County forgone balance will equal $11,441,506. 

To “backfill the levy reduction,” the county will rely on other funding sources to support general fund expenses. Some options, according to the news release, are:

• $2.2 million in unanticipated 2021 revenue derived from state liquor sales, fees and other allotments 

• $1.8 million in remaining CARES grant funding 

• Current general fund reserves

Darrow wrote that the “base tax number can be partially, but not completely restored” through a 1% maintenance and operations allowance for the 2023 budget season. The action would replace approximately 63%, or $529,891, of the shortfall.

“Bottom line, the taxpayers of Kootenai County will have a little extra under the tree in 2022 and 2023,” the release says.

Info: ddarrow@kcgov.us