Tax Trouble: Why Idaho Homeowners Are Paying More

Taxes are climbing for homeowners in Nez Perce County, and the state government is the main reason. The county's budget is set to grow by 1. 62%. Schools and the city of Lewiston are also getting more money, with increases of 2. 8% and 5% respectively. But homeowners are facing much steeper hikes. The issue boils down to how property taxes work. Home prices are rising faster than commercial properties. Since taxes are based on a ratio, homeowners end up paying more while businesses see little or no change in their taxes. Idaho's Homestead Exemption is supposed to help by protecting half the value of a modest home from taxes. But the cap is stuck at $125, 000, which hasn't changed with inflation. If it had, the cap would be around $238, 000. This means homes worth over $250, 000 are being taxed too much. Instead of fixing the Homestead Exemption, the state is giving out tax credits to ease the burden. But these credits don't solve the problem. For example, a home in Lewiston's Normal Hill saw a 9. 3% tax increase. Without the state's tax credit, the increase would have been even higher. But with an adjusted Homestead Exemption, the owners would have paid less overall. Another home in Lewiston Orchards saw a 6% tax increase. Without the state's tax credit, the bill would have been $680 more. But with an inflation-adjusted Homestead Exemption, the tax bill would have been even lower. Even homes outside the city limits are feeling the pinch. A home just outside Lewiston saw an 8. 5% increase in assessed value, leading to a 2% tax increase. Without the state's tax credit, the bill would have been higher. But with an adjusted Homestead Exemption, the tax bill would have been lower. Commercial properties are seeing different results. A Lewiston hotel complex got a 5% discount on its property taxes. A grocery store saw a 1. 5% tax increase, but that's less than the growth in its assessed value. An automobile dealer's taxes dropped by 4. 6%, even though the assessed value increased. The situation is likely to get worse. Home values are still rising faster than assessments, so next year's tax bills are expected 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. This puts the state's House Speaker in a tough spot. He can either fix the Homestead Exemption or deal with even bigger tax increases next year.