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Posts published in “Day: June 4, 2006”

An important question

Of the three northwest states, concern about property taxes has hit hardest, though because sales prices on property are running so high in all three (and nationally), this is not a debate likely to remain there.

There's a deceptive element to this: Housing prices are not the only reason for the tax hikes. If local government spending levels increase only modestly at a time when housing prices are booming, then the actual tax amounts would not increase greatly because the tax rates assessed would drop. The taxes assessed are running hotter in parts of Idaho, though, not just because valuations are up, but also because of growth. In places like central and west Kootenai County, western Ada County and eastern Canyon County, growth has been so hyperbolic that costs - which as a matter of course, nationwide, tend to rise in times of fast growth - have been driven up along with housing prices.

This is painful, and you can understand the concern of the people who live in those areas (and it is those areas which have most been driving the property tax revolt in Idaho). Adjustment in that tax structure probably is needed, and may be gotten through a special legislative session. (Maybe.)

But as this course is pondered, public officials and taxpayers both would be well advised to bear in mind the consequences of an economy now held afloat largely on the basis of inflated, and likely unsustainable, housing prices. Which makes a question posed by state Senator Brad Little, R-Emmett, to his fellow senators, maybe the most pertinent question of the moment in Idaho and beyond:

"We must ask the question — what if the real-estate market slows or stops?"