Tax initiative is just one page

BOISE – A retired physician and former state epidemiologist filed his own property tax-limiting initiative on Tuesday, seeking to cap taxes and values just for the primary homes of Idaho residents.

“We’re not talking about rich people and second homes and stuff like that; we’re talking about the primary residence of an Idaho resident,” said Fritz Dixon of Meridian. “Now whether that’ll stand constitutional muster, I don’t know.”

Dixon submitted his one-page initiative to the secretary of state’s office on Tuesday, and it was forwarded to the Idaho Attorney General’s Office for review. Already on review there is another property tax-limiting initiative that runs nearly 100 pages, seeking to cap property taxes for all types of property at 1 percent of value, to freeze and then cap values, and to make a series of other changes in state tax laws.

“I think overall it’s an expression of the extreme amount of frustration amongst many citizens in Idaho,” said Sen. Shawn Keough, R-Sandpoint, co-chairwoman of a joint legislative committee that just concluded a dozen public hearings around the state on property tax relief. “People are frustrated, they’re alarmed, they’re scared, and this is another expression of all of those sentiments that we’ve heard across the state from homeowners.”

A common theme at the statewide hearings was that longtime residents fear fast-rising real estate values will eventually make their property taxes so high that they’d no longer be able to afford to stay in their homes. Many also asked that lawmakers increase the homeowner’s exemption, which hasn’t been adjusted for inflation since voters enacted it in 1982. The earlier, lengthy initiative, however, eliminates the homeowner’s exemption.

Dixon’s measure would leave the homeowner’s exemption intact, but would make a series of other changes, including:

“”Real property used as the primary residence of an Idaho resident” would have its tax limited to 1 percent of value, and values would be capped at 2002 levels and allowed to rise no more than 2 percent a year unless ownership changed. At sale, the value would go to the sales price.

“A two-thirds vote of all members of each house of the Legislature would be required to raise any tax.

“Lawmakers would be forbidden from imposing any state property tax – none is charged now, all property taxes in Idaho are imposed by local governments and schools – or any real estate transfer tax. Idaho currently has no real estate transfer tax, but some at the tax hearings called for imposing one to offset the impact of real estate speculation on property taxes for existing residents.

“Cities, counties and special districts would get local-option tax authority, and could impose any kind of local tax by a two-thirds vote – except for property tax or a real estate transfer tax.

“Bond elections could be held only at general elections, and all ads about proposed bonds would have to specify interest costs.

The measure also includes this sentence near the end: “The same taxing rate must apply to both residential and business property.”

That appears to conflict with the main thrust of the initiative, which sets up a different taxing system for certain types of residential property. Dixon said, “I stuck it in there because we know that the taxation on property has been flooding away from business property to individual residents for many years.”

If the attorney general’s review shows problems, Dixon said, “then I will decide if you’ve got to have one or the other.”

Idaho’s state constitution requires uniformity in taxation, meaning similar property is taxed at the same rate. Both initiatives could raise uniformity questions and also raise the same questions that stymied a 1978 One Percent Initiative that Idaho voters passed, about how Idaho’s system of multiple taxing districts would work with a 1 percent cap. Neither initiative specifies how multiple, overlapping taxing districts would achieve a total rate of no more than 1 percent, when each, by law, sets its budget independently of the others.

Dixon said the attorney general’s review will point out any constitutional problems. “If he says this is unconstitutional and shows you that it’s unconstitutional, you’ve got to give some weight to that, and then you might have to change it,” he said.

Dixon worked 30 years for the state Department of Health and Welfare before retiring in 1992, and becoming a political activist. He lobbied the Legislature as a volunteer on behalf of the AARP and ran unsuccessfully for the state House of Representatives in 1994.

After hearing about the lengthy, complicated property tax initiative proposed by Orofino-based Idaho Property Tax Reform, Dixon said he thought he could “do it in a page.”

“Mine’s one page, because people actually are supposed to read it before they sign it,” he said. “If the other organization doesn’t get their 100-pager passed, and there’s another that gets past the attorney general, maybe they’ll say ‘yours is better than one that didn’t fly.’ “

The attorney general has 20 working days to review the measure.