Property tax relief is coming after Idaho lawmakers override veto. How the bill changed

Idaho homeowners will soon see relief from rising property taxes, but school districts will lose their most important bond and levy election date.

After two days of negotiating, lawmakers Wednesday voted to override Gov. Brad Little’s veto of House Bill 292, a sweeping property tax relief bill.

The Republican governor raised concerns over the bill’s effect on the state’s bonding ability and the provision prohibiting school districts from holding bond and levy elections in March, by far the most successful month when schools ask local taxpayers to fund construction and staffing costs.

“While there may be differing opinions on how to address this issue, our goal is aligned — to help Idahoans,” Senate Majority Caucus members said in a news release. “Today’s vote will make a significant difference in the lives of those facing financial hardships due to rising property taxes.”

The Legislature passed a trailer bill Wednesday that seeks to account for the bonding issues while maintaining the March election prohibition. House Bill 376 ensures that $80 million will still be available for road project bonds.

Altogether the two bills direct $117 million to property taxpayers in the upcoming fiscal year, according to a state economist’s analysis, Madison Hardy, Little’s spokesperson, told the Idaho Statesman by email.

Gerald Hunter, president and executive director of the Idaho Housing and Finance Association, in a letter to Little last week wrote that House Bill 292 was jeopardizing bonded road projects by reshuffling sales tax distributions. The trailer bill ensures that road projects funding will have priority.

Little said Wednesday that he’s “pleased” lawmakers addressed his concerns on bonding.

“Idahoans are clamoring for additional tax relief, and the Legislature’s actions are a step in the right direction on this longstanding issue,” he said in a news release. “The process worked, and we are getting real property tax relief done for Idahoans.”

House Bill 292 leverages the state’s projected $1.4 billion surplus and sales tax revenue for ongoing property tax credits and aid for school districts to pay down debt backed by property taxes.

A previous independent analysis of House Bill 292 estimated 20% would come off an average property tax bill, but less state funds will go to relief after this week’s changes.

Education leaders told lawmakers in recent weeks that March bond and levy elections are crucial to funding schools when state appropriations fall short.

“By eliminating the March school election date, the most important on the calendar for the passing of school bonds and levies, this legislation risks destabilizing public school finances and puts children’s learning at risk,” Layne McInelly, president of the Idaho Education Association, the statewide teacher union, said after Monday’s veto.

Hardy said it’s “unfortunate we lost some local control in school funding.”

“Gov. Little remains committed to supporting education as his top priority in the years ahead,” she said.