Governor vetoes property tax bill

Idaho Gov. Brad Little vetoed a major property tax bill Monday, calling on the Idaho Legislature to bring him a new bill and get the property tax issue right.

Little vetoed House Bill 292 after expressing several concerns about elements of the bill unrelated to property tax reduction.

Little opposed a section of the bill that would eliminate the March election date local school districts use for bond issues and levy elections. Little also said the bill jeopardizes bonding for critical infrastructure projects and funding for transportation initiatives.

In a letter sent to legislators Monday, Little said the property tax bill reorders the priorities of claims for sales tax distributions and removes minimum guarantees for Transportation Expansion and Congestion Mitigation bond debt service.

As a result, Little said the state had to pause the sale of Transportation Expansion and Congestion Mitigation bonds that was scheduled for this week.

“In short, House Bill 292 has functionally halted major transportation projects access the state of Idaho,” Little wrote in Monday’s letter.

Proceeds from bond sales were anticipated to provide $400 million in financing to contribute to 11 projects, including widening and replacing interchanges on sections of Interstate 84, designing bridge projects on U.S. Highway 95 and U.S. Highway 12 and widening Eagle Road.

“Let’s get property tax relief done right this session,” Little said in a written statement announcing the veto. “The simplest solutions are usually the best solutions, and I believe we can extract the property tax portions of House Bill 292 and deliver a true property tax relief bill this session. A property tax relief bill this session needs to be simple and carried out in a way that does not harm public schools, does not hold up needed transportation projects, and does not reveal more unintended consequences. The people of Idaho deserve simple property tax relief that will endure over time!”

House Minority Leader Ilana Rubel, D-Boise, told the Idaho Capital Sun she is pleased Little vetoed the bill. In an interview Monday afternoon, Rubel said it will be worth it for the Idaho Legislature to stick around for a few extra days and fix the property tax bill now so the state doesn’t spend years dealing with unintended consequences.

Rubel said she sees a pretty clean path to remove what she described as the bad parts of House Bill 292 and keep the good parts. That means removing the section of the bill that would eliminate the schools’ March election date and then reestablishing the priority for sales tax collections to go toward long term infrastructure projects and local governments before property tax reductions.

“We can’t do it in a way that leaves our schools unable to function and in a way that shuts down highway projects,” Rubel said.

Ruble said property tax reduction is her top priority and the issue she hears about most often from her constituents.

“I know people in their eagerness for property tax relief are so desperate that they are ready to take absolutely anything,” Rubel said “We are eager to deliver them help. But first we do need to make sure that we don’t do serious damage along the way.”

Efforts to reach House Majority Leader Mike Moyle, R-Star, were unsuccessful on Monday.

Property tax reduction was a top priority Idahoans identified in a recent Boise State University public policy survey, and the issue has been a major focal point during the 2023 legislative session. Little called for property tax reductions in his Jan. 9 State of the State address and still supports addressing the issue this session.

“Idaho stands apart from every other state because we focus on making taxes fair, simple, predictable, and competitive,” Little added. “House Bill 292 is not a simple bill. House Bill 292 is a hodgepodge of policy items intermingled with property tax relief.”

The Idaho School Boards Association issued a statement Monday saying it supports Little’s veto.

“We applaud the governor for vetoing HB 292, a property tax relief bill that removes the March election – which serves as the most critical election date for school districts who rely on supplemental levies to maintain their operations,” the statement read. “We want to be crystal clear: ISBA supports property tax relief to homeowners – but removing the March election date was not a necessary component of the relief proposed under HB 292. We urge the House & Senate to sustain the veto and work together quickly to bring a bill back that keeps the March election date intact and eases the other concerns related to transportation funding.”

The Idaho Education Association also issued a statement in support of Little’s veto on Monday. The association said it will continue to push for and support property tax reduction proposals that do not affect school elections and finances.

“The state of Idaho’s refusal to properly fund public schools from state coffers makes bond and levy elections critical for public school districts across the state,” the statement read. “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.”

Idaho House will be able to attempt to override Gov. Little’s veto

Little’s veto arrives late in the 2023 legislative session, which Republican legislative leaders had tried unsuccessfully to wrap up by Friday.

A supermajority of members of the Idaho Legislature voted to pass House Bill 292 earlier this month. The Idaho House of Representatives voted 63-7 to pass the property tax bill on March 14, and the Idaho Senate followed suit with a 32-3 vote on March 20.

Legislators may attempt to override the veto, which would take a two-thirds majority of the members present in each legislative chamber. Because the property tax bill was a House bill, the Idaho House will get the first chance to respond to the veto. If all 70 members of the Idaho House are present, it would take 47 votes to override Little’s veto.

The Idaho House was at recess on Monday when Little vetoed the bill and is scheduled to reconvene at 8 a.m. Tuesday at the Idaho State Capitol in Boise.

This story was originally published March 27, 2023, in the Idaho Capital Sun. The Sun can be found online at idahocapitalsun.com.