Tax Trouble: Why Idaho Homeowners Are Paying More

The Big Picture

Property taxes are going up, but it's not the local officials' fault. The state government is the real player in this game.

• Nez Perce County: Budget set to rise by 1.62%
• Lewiston School District: 2.8% increase
• City of Lewiston: 5% boost

But here's the kicker: homeowners are seeing much bigger hikes.

The Market Factor

The problem starts with the market. Home prices are shooting up faster than commercial properties.

• Property taxes are based on a ratio, so homeowners are paying more while commercial property owners are seeing their taxes stay flat or even drop.

The Homestead Exemption Issue

Idaho's Homestead Exemption is supposed to balance this out by protecting half of a modest home's value from taxes. But it's capped at $125,000, which hasn't kept up with inflation.

• If it had, the cap would be around $238,000.

This means homes worth more than $250,000 are being overtaxed.

Instead of adjusting the Homestead Exemption, the state has been handing out tax credits to soften the blow. But these credits don't fix the problem.

Case Studies

1. Lewiston's Normal Hill
   • 9.3% tax increase
   • Without the state's tax credit, the increase would have been even higher.
   • With an inflation-adjusted Homestead Exemption, the owners would have paid less overall.

2. Lewiston Orchards

   • 6% tax increase
   • Without the state's tax credit, the bill would have been $680 more.
   • With an inflation-adjusted Homestead Exemption, the tax bill would have been even lower.

3. Outside Lewiston

   • 8.5% increase in assessed value, leading to a 2% tax increase.
   • Without the state's tax credit, the bill would have been higher.
   • With an inflation-adjusted Homestead Exemption, the tax bill would have been lower.

Commercial Properties

Meanwhile, commercial properties are seeing different outcomes.

• Lewiston Hotel Complex: 5% discount on property taxes.
• Grocery Store: 1.5% tax increase, but that's less than the growth in its assessed value.
• Automobile Dealer: Taxes dropped by 4.6%, even though the assessed value increased.

The Future Outlook

The red flags are waving. Home values are still rising faster than assessments, so next year's tax bills are likely to be even higher.

The state is facing a budget deficit, and lawmakers might not keep spending $328 million on property tax credits.

If education funding is cut, local levies might have to make up the difference.

The Speaker's Dilemma

This puts the state's House Speaker in a tough spot. He can either fix the Homestead Exemption or own the massive tax increases coming next year.