Meridian Mayor Robert Simison says the Idaho Legislature made a poor decision about property taxes, and Meridian taxpayers are being forced to pay for it.

Simision says a law enacted in 2021 in an effort to curb property tax increases is costing the city millions and forcing it to take more of residents’ property tax dollars than he is comfortable with.

The law codified changes to the state’s property tax law that Simison says have hurt Meridian ever since.

Every year, cities and other taxing jurisdictions sets their budgets to cover the cost of their services. They have long been allowed to raise the property-tax portion of the budget by up to 3% per year unless voters approve a larger increase.

Until the 2021 law took effect, they could also collect property taxes on newly built or annexed properties each year. They could boost the 3% cap in any given year by whatever amount of revenue they had foregone in prior years by keeping increases below 3% then. And they could start adding back any revenue that had been siphoned away to urban renewal districts once those districts expire.

The 2021 law still allows those increases, but it capped the amount that local governments can increase their property tax budgets from all of those sources at 8%. That caused a problem for fast-growing Meridian, because it meant the city could no longer take full advantage of the revenue the old law allowed from new construction to the tax rolls.

That’s money city leaders counted on to cover expenses resulting from serving more people. Meridian has grown 6.4% per year on average since 2010, and its population is now 143,000, according to the proposed budget’s executive summary.

“Growth is no longer paying for growth,” Simison said in his annual State of the City address on June 5.

Simison said the law is costing the city $1.4 million each year, and that amount continues to grow.

As developers continue to build subdivisions, Simison said the city misses out on more and more of the money that it used to get from that construction. That will affect the fiscal year 2025 budget.

“Basically, our levy rate has decreased about 50% during this time period while the value of our new construction more than doubled,” he said. “The amount of new construction revenue we received in 2016 is about a 15% difference compared to 2025.“

Without the new law, Meridian would be receiving $2.9 million a year from new construction, twice what it receives now, he said.

Simison said the missing $1.4 million could fund 10 firefighters or police officers needed to keep up with public safety.

To offset the revenue loss, Simison said he will propose taking the full allowable 3% property tax increase in the budget for the fiscal year that begins Oct. 1 and 1% of the foregone property tax increase that the city did not take last year.

“I don’t like taking foregone one bit,” he said. “But if we want to keep up with our public safety needs, it is what we need to do. With limited resources for new positions, my recommendation is to invest in needed personnel for the Police Department and related services.”

In 2021, Rep. Mike Moyle, R-Star, who authored the property tax bill, said the law would slow the rising property taxes that burden Idaho homeowners.

Moyle said the $1.4 million that Simision is upset about not receiving is savings for property taxpayers.

“The $1.4 millions are tax dollars left in property taxpayer’s pockets,” Moyle told the Idaho Statesman by phone.

He criticized Simision for not budgeting for growth better and for using the city’s savings account to hire police officers.

Last year, on average, homeowners in the Treasure Valley saw lower property tax bills. That was because the assessed values of properties in the valley decreased and because the Legislature dedicated $205 million, plus $100 million in state surplus money, to property-tax relief. But local elected officials warned taxpayers not to get used to the one-time savings.

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