Kootenai County aims to improve tax correction transparency

COEUR d’ALENE — Kootenai County staff have asked commissioners to change how they approach tax cancellations and value corrections for prior years in order to communicate when those changes impact taxing districts. 

Julina Hildreth, a senior accountant in the Kootenai County Auditor’s Office, proposed the change Tuesday. 

“You get these notifications to correct value, but on this form, all it says is the value,” she told commissioners. “Unless you guys really do a lot of homework, you’re not going to know what the implications are. You should be making educated decisions, and I don’t feel like you have enough information to make an educated decision.” 

Hildreth pointed to last year, when the appraiser had mistakenly entered the front footage of a lakefront property as 6,966 feet instead of 69.66 feet, causing the property’s valuation to jump from $1.4 million in 2022 to $54 million in 2023. The $53 million property value assessment error affected seven taxing districts to the tune of nearly $200,000. 

Commissioners don’t examine or approve valuation changes individually. Instead, they approve the valuation changes put before them by the assessor’s office as part of the weekly consent calendar, which groups routine business and reports into one agenda item that can be approved in a single action. 

When the commissioners approved the valuation change for the lakefront property in October 2023, there was nothing to set it apart from the others. The change’s large impact to taxing districts didn’t come to the board’s attention until weeks later. 

“Had you had this information, it wouldn’t have slipped through the cracks,” Hildreth said Tuesday. 

Commissioner Leslie Duncan noted that, in general, the board is required to make certain tax cancellations and valuation changes, regardless of the change’s wider impact. 

“We are not in the habit of just willy-nilly canceling and changing valuations,” she said. “It’s usually based on an error that needs to be corrected or state law.” 

Alicia Lynch, who works in the auditor’s office, said the process works well overall but has no mechanism by which to communicate with taxing districts when valuation changes or tax cancellations affect them. Adding some way to flag large changes would help. 

“It would invite discussion between the departments,” Lynch said to commissioners. “While your hands are tied and you would have to make the decision, we will already be moving and planning for the impact. We can roll out communication to the districts that are affected. Right now, that’s the only part that’s really missing in this process.” 

Hildreth said tax cancellations and valuation changes are especially thorny when they involve prior years, with taxes that have already been paid and distributed to taxing districts. 

“It’s when we have to claw back money from a district to pay back a taxpayer that’s an issue,” she said. 

Commissioners indicated they will pay particular attention to cancellations and valuation changes for prior years, beginning with Wednesday’s requests for cancellation of taxes.