Cd'A, PF sue county

COEUR d'ALENE — The cities of Coeur d’Alene and Post Falls filed suit against Kootenai County and Treasurer Steve Matheson on Thursday over what they said was the county’s refusal to remit late charges and interest associated with delinquent property taxes owed to the taxing districts in the county.

"Kootenai County and the Treasurer’s actions in retaining funds that do not belong to it are contrary to state law and deprive multiple taxing districts of funds needed to serve their constituents," a press release from the cities said.

The actions by the county are unprecedented, the release added.

"Until this year, Kootenai County had always remitted the penalties and interest to the respective taxing districts as required by law."

The treasurer began withholding funds Oct. 1, 2022.

According to the press release, the budget impacts to the taxing districts from the county's and Matheson’s actions "are significant." The annual impact to Coeur d’Alene and Post Falls alone is about $70,000 and $85,000, respectively.

Matheson, in a statement to The Press, wrote that the suit "was anticipated and is welcomed."

"I sympathize with the other taxing districts and the financial challenges they face," he wrote. "However, I do not believe Idaho statutes allow me the discretion to do as the cities are demanding. As I have stated repeatedly, my interpretation of Idaho statutes is that I am required to remit to the county all interest earned on public monies in my control. Title 57 is clear on this point."

Matheson wrote that in their argument, the cities and the highway districts fail to recognize that a property tax delinquency constitutes a perpetual lien in favor of the county securing what is now a debt obligation managed by his office.

"Admittedly, Idaho statutes are less clear regarding penalties and that is why I have been working with our local legislators," he wrote. "I'm hoping the Idaho Legislature will clarify their intent where they want this money to go."

The county previously distributed a share of penalties and interest to the taxing districts. For some of those districts, that's thousands of dollars and part of their budgets.

In the lawsuit, the cities of Coeur d’Alene and Post Falls look to:

•Require that Kootenai County and Treasurer Matheson distribute to each taxing district their share of the late charges and interest collected on delinquent taxes.

• Prohibit Kootenai County and Treasurer Matheson from keeping such funds in the future.

• Order an award of costs and attorney’s fees incurred in pursuing this action to the cities.

A similar suit has been filed against Kootenai County by East Side Highway District, Lakes Highway District, Post Falls Highway District and Worley Highway District, the release said.