In Idaho, we value our quality of life. One way we maintain it is through local services including public safety, emergency response, and parks. These services and more are funded by property taxes. Our challenge is that homeowners are shouldering an increasing, unsustainable share of the property tax load while other types of real estate – even some quite profitable corporations – are paying less with each passing year.
Reindexing the homeowner’s exemption is the simple, obvious step to rebalance this responsibility.
For years, we had an “indexed” homeowner’s exemption. This is the portion of your home value that isn’t taxed. Indexing meant the value of the exemption rose if home values went up. This shielded homeowners from significant increases in their property tax bills due to market fluctuations.
In 2016, a majority of Republican legislators catered to lobbyists by capping the homeowner’s exemption at a set level. Every Democratic legislator voted against the cap because they predicted what we see today: a dramatic shift of the tax load onto homeowners. If Idaho still had an indexed exemption today, it would be worth $224,000, compared to the $125,000 exemption in law.
Democrats are now fighting to restore the annual adjustment. This effort is crucial because the current approach to property taxes has failed. In 2021, Republican lawmakers pushed through House Bill 389, touted as a major property tax reduction. It was anything but. It focused on impeding local government’s ability to set budgets, kicked certain low-income seniors off of property tax assistance, and let the homeowner’s exemption creep up a bit.
You don’t have to take my word for it. Just look at your own bill. Homeowners haven’t seen the promised benefits, because they were never real. The legislation was a distraction from the root cause.
The numbers tell the real story.
From 2021 to 2022, property taxes collected across Idaho increased by 3.3%, yet homeowners paid, on average, 9.3% more. Meanwhile, commercial property owners saw a 13.5% decrease in their property taxes. This pattern of diverging paths repeats every year, with compounding results. For example, a big box store in Canyon County saw a 49% decrease in property taxes since 2016.
Homeowners are paying more because they are shouldering more of the load as commercial interests enjoy deep tax cuts. It’s not right nor is it sustainable.
Idahoans are proud to contribute their fair share to protect our quality of life. In return, we deserve a fair property tax system. The obvious solution is to bring back the annual adjustment to our homeowner’s exemption. Legislators just have to put Idahoans before the interests benefiting from the status quo.
Lauren Necochea, Chair
Idaho Democratic Party