By Michael Rosedale
Editor’s note: The Reader has been hearing from property owners across Bonner County that they saw exorbitant increases to their property taxes during the last billing cycle. Bonner County Clerk Michael Rosedale submitted this article unsolicited in hopes of explaining why, in some cases, those tax bills saw large hikes.
“My taxes have gone through the roof!” This is what I’m hearing from my friends and family — and from my wife and my mortgage company. My own property taxes increased by 27%. My taxable property value increased by nearly 90%.
Many of you have seen even greater increases. I’ve had a lot of people say, “What the heck is going on?” and “I thought taxes could only increase 3%.”
As a good friend of mine who lives in the Sunnyside area said: “Government is totally corrupt. County taxes are out of control!”
The truth is, total Bonner County tax dollars did increase by “only” 3% over last year in total, along with the new properties that hit the tax rolls (called “new construction” to be precise). It is the redistribution of them that creates the extreme swings that causes heartburn (understandably).
So why did my taxes skyrocket? My property appraisal went up by way more than 3%. It went up about 90%! How can what I say be true? Hopefully this will explain what “is,” for better or for worse. (And no, I don’t like it either.)
This is such an important topic. I want to make sure we’re using the same word definitions:
• Assessment: The value assigned to my property by the Assessor (different that taxes)
• Taxes: The taxes billed against my real property (different than assessment)
• Budget: The total amount of Bonner County’s published annual budget, including all the departments (this is not the same as taxes)
This is one of the most complicated processes to understand for most folks regarding county and state codes, even for those in elected offices. So please hang in here and read this through. Maybe twice.
The entire process of taxation on our properties begins with the county assessor. The assessor’s job, per Idaho Code, is to calculate and convey the market value of your property within the window of 90% to 110% of actual, as of Jan. 1 of that year. The assessor gathers all the market comparables and other data from the prior year in order to derive these values. Taken into account are market comps, replacement costs and rental/income value. Every year the Assessor recalculates every property, based on changes to the above. In addition, the assessor makes a visit to all properties in Bonner County once every 5 years to further appraise and validate assumptions about each property.
These preliminary values are then sent out in assessment notices that can, if so desired, be appealed before the Bonner County Board of Commissioners. This should only be done after first contacting the assessor and explaining your reasons that a property is (in your opinion) over-assessed. Many times the assessor gains new information from such conversations and is able to adjust the assessment to a more “market proper” rate. If not, you can then file an appeal with the commissioners by the fourth Monday in June.
Once these have been resolved, either with the assessor, the commissioners or State Tax Appeal, then the totals are locked and the total value of the entirety of Bonner County is determined.
The next step is the budget process. Idaho Code limits the amount of tax increase to 3% over the prior year’s tax dollars received (forgone is a separate issue but there is basically zero in Bonner County and it wasn’t used). The county clerk is in charge of assembling the budgets submitted from the various departments and elected officials and working with the county commissioners to arrive at a budget for the following year.
The clerk takes into account cash on hand, expected revenues from all sources yet to be received, budgets remaining to be spent in the current year and next budget year; along with future conditions that change for cash revenues and costs. The budget gets revenues from grants, fees, PILT (payment in lieu of taxes for the federal government’s use of our land), drivers’ licenses, permits, etc. The budget also is funded in part by taxes.
It is the taxes portion of the budget that can only increase by 3% over the prior year’s tax dollar receipts (adding to this new construction which is tax on new properties paid by new property owners). The net effect for taxes is that the new taxed amount to taxpayers, on the average, will be 3% more than the prior year. On the average. Obviously on an individualized basis the differences can be massive (as personally experienced with my own property).
Here is a summary of last year’s Bonner County budget, and this new fiscal year’s budget. You’ll see that the taxes on existing properties only increased 3%:
The 2021-2022 budget property tax revenues: $30,463,408
The 2022-2023 budget (that you are currently being taxed for) is:
2022 budgeted taxes: $30,463,408
New Construction (born by new taxpayers): $803,126
(Other replacement per statute): 12,642
Total 2022-2023 taxes: $32,193,078
Again, this is Bonner County’s levied taxes.
As you can see, the taxes for existing homeowners increased by only that 3%. The new construction amount was added to the total but then paid for by a larger number of properties. Thus, if your taxes went up by more than 3%, someone else’s had to come down to make up for that.
Bonner County makes up only roughly 30% to 50% of your tax bill. By statute we act as the central collection agent for all taxing districts, then we distribute those funds to those districts when we receive them: schools, sewer, water, hospital, library, fire, recreation, soil, ambulance, road and bridge, highways, city, cemetery, translator, etc. Your tax bill reflects only those that apply to your property. I point this out so that you realize most likely more than half of your taxes are for taxing districts other than the county. This doesn’t make it any better, but it is good to understand this.
The next step is to determine what percentage of this new taxed amount is to be paid by each tax parcel (property). The county treasurer’s job, per Idaho Code, is to take the individual total property value, subtract out the exemptions and arrive at a taxable value. This is then divided by the total county taxable value. This results in your share of the total Bonner County taxable value “mill rate”; a term most of you are familiar with but not used officially anymore. Your “mill rate” is then multiplied by the total taxes amount budgeted. The treasurer has no discretion in this — it is ordered and controlled by statute.
Many of us (like myself) experienced much more than a 3% increase in taxes (mine was 27%). On the average this means that for every property tax payer like me, there were other property tax payers that had a reduction in taxes. Those folks are quite happy, and I would be too if I were one of them!
I know my property was properly assessed per market value, but like most of us, I don’t like the resulting tax increase. All the same, it was a fair assessment, which is why I didn’t appeal it. I know I probably could have sold my property for that assessed amount.
Some folks didn’t experience such a high property appreciation, and as such it was proper their taxes didn’t go up, but rather decreased.
It is not the increase in tax revenues the county (or any other taxing district) does that is the cause of the massive heartburn per se, as all taxing districts have that 3% handcuff (except for school districts or special voted-on bonds/levy overrides). Rather, it is the large swings of relative “piece of that tax pie” that gets our angst up. Understandably.
I can’t speak for the assessor as to their job, but as for my individual property, I know that as of this past Jan 1, it was properly assessed. That means I must have been under assessed prior to that if my relative piece of the pie got larger than more than 3% this year, which it did. I also know the incoming assessor, Grant Dorman, will try to assess it fairly this year as well and into the future.
Hopefully you understand this process a little bit better now. I’m always happy to meet with anyone regarding my part of this equation and try to answer any questions you may have. Although it is a painful topic, I enjoy meeting with people to explain county processes that are not intuitively clear.
Michael Rosedale is the Bonner County Clerk.
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