By Lyndsie Kiebert
In order to balance the 2022 budget, Bonner County commissioners voted Aug. 23 to take $2.7 million in forgone taxes — a move prompted by new state legislation, increased inflation and historically tight budgeting practices.
“We never ever, ever thought we’d see the day that we’d have to take [forgone], but today has become that day,” said Commissioner Dan McDonald during the evening budget hearing, during which commissioners unanimously approved a $62.4 million budget for the upcoming fiscal year.
Forgone taxes are funds left unused in years when the county has opted not to increase taxes by the allowed annual 3%. By taking forgone in 2022, Bonner County taxes will increase about 9%, averaging out to about 4.7% per tax bill when taking into account the rates imposed by other taxing districts.
The decision to take forgone was based on several factors, one being a new Idaho law passed late in the 2021 legislative session that required municipalities choose between taking their 3% property tax increase and only a portion of taxes on new construction, or dip into forgone dollars. With the first option only amounting to about $1.2 million and the budget too tight for that scenario, the county will instead empty its forgone coffers in the amount of about $2.7 million in order to balance the FY2022 budget.
Another factor is inflation. Bonner County Clark Mike Rosedale said that over the past few years, the board has elected to use “0% or close to 0%” of the allowed annual 3% property tax increase, relying instead on new construction and cash rolled forward to make up for regular rates of inflation. Rosedale calculates current inflation close to 12% — which limited leftover funds from FY2021— and he said predictions place that figure closer to 20% over the coming year.
“They’ve been as conservative, fiscally, as they possibly can with taxes,” Rosedale said of the board of commissioners, “and now it’s just finally come to the point where they can’t hold their breath underwater anymore without coming up for air.”
McDonald said fuel prices have increased 75% over the past budget year, driving those line items up for 2022, and pressure on wages in order to attract and retain employees has also been a strain on this year’s budgeting process. As a result, many departments were denied requests for new equipment or additional personnel.
While Bonner County will receive about $8.8 million in American Rescue Plan funds as part of the latest federal COVID-19 stimulus package, guidelines from the U.S. Treasury currently dictate the money be used mostly for water and sewer projects, broadband expansion and other things Bonner County does not manage. Rosedale said that with the exception of only a few things, “we can’t even touch that money.”
“We will have it, but right now, unless they change the rules, we can’t use it,” McDonald added. “It would have been nice to use some of that at least for now to … reduce the blow a little bit, but the problem is when you start using money like that, it’s not going to be there forever.”
Commissioners voted unanimously to adopt both the $62.4 million Bonner County budget and the separate $5 million EMS budget.
Rosedale recognized that several citizens felt left out of the budgeting process, despite meetings being open to the public. He pledged to work to find a better way to “interface with the community” in years to come.
“Going forward, that will be something that we do better next year,” he said.
Those interested in viewing the FY2022 Bonner County budget can call the clerk’s office at 208-265-1437 to learn how to secure a copy, or email [email protected].
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