How unexpected revenue, federal COVID funds helped fuel Ada County property tax relief

The Ada County Board of Commissioners’ unanimous decision to cut $12 million from the upcoming fiscal year’s property tax levy came after major federal aid packages and unexpected revenue brightened the county’s finances.

In deliberations over the $303 million tentative county budget — the highest ever — the commissioners voted on June 23 to trim property taxes in fiscal year 2022, which begins on Oct. 1.

The economic disruption of the pandemic prompted the county to budget carefully and reign in its expectations for the upcoming year, but federal coronavirus relief money and tax revenue helped buoy finances.

The county received $11.8 million from the Coronavirus Aid, Relief, and Economic Security Act, a major stimulus bill passed at the start of the pandemic last year, according to Ada County Clerk Phil McGrane. In June last year, Gov. Brad Little apportioned federal relief funds for local governments in the state — $16 million for Ada — directing them to use that money for property tax relief. And the county expects to receive an extra $10 million in sales and other tax revenue over the course of the next fiscal year.

“It was sort of a perfect storm this year, and I say that in a good way,” Commissioner Kendra Kenyon told the Idaho Statesman by phone.

All of that unexpected cash flow helped lift the county to a prosperous position and led the commissioners to forgo increasing property taxes for FY 2022, and instead cut them. More than $153 million in property taxes were collected in fiscal year 2021, and the county plans to collect not quite $142 million in the upcoming fiscal year.

“Coming out of the pandemic, we’re in a really good financial position,” said McGrane.

To cover next year’s $12 million cut, $4 million will come from stimulus funds from the American Rescue Plan Act, passed by Congress this spring, and the remaining $8 million will come from taxes the county has collected, McGrane said.

“We were super conservative last year,” McGrane said. “We estimated a decrease in sales tax revenue, but instead of seeing a decrease, we actually experienced an increase. The economy is doing great here locally.”

The cut will equate to about $44 in tax relief for a median homeowner in Ada County, and taxpayers should see that reflected on their bills in November, according to McGrane. Housing prices have soared in the past three years in the Boise area, with Ada’s median sales price surpassing $500,000 earlier this year.

Kenyon said she hopes that the relief, though small, will help homeowners.

“COVID hit folks pretty hard here in the valley,” she said. And over the past decade, “the burden of taxes has fallen on the residential homeowner.”

Said Commissioner Rod Beck: “This is $12 million of property tax relief that the citizens of Ada County wouldn’t have gotten otherwise had we budgeted to the full extent that we could,” referring to the 3% increase that was bypassed.

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