Senate Tax Committee hears SB 117 to cap local budget growth; cities, counties and public-safety groups urge rejection

Senator Daniel Zolnikov, sponsor of Senate Bill 117, told the Senate Tax Committee on Wednesday that SB 117 would cap annual local government budget growth at 4%, raise the discretionary inflationary adjustment to 100% (from the current half-rate adjustment), and change the treatment of newly taxable value so only 50% of newly taxable value would increase local budgets. Zolnikov said the bill’s goal is to slow compounding budget growth tied to newly taxable commercial and centrally assessed developments so existing taxpayers see some relief in mills.

“I was asked to move it early because last time, there was 12 meetings on this bill,” Zolnikov said as he introduced the measure and described the bill as a starting point for negotiation. He said the newly taxable change is intended to let new development contribute to budgets without fully compounding future local spending: “The whole purpose of the change in the newly taxable portion [is] to help lower mills for everyone else and incentivize growth and development to continue that.”

The governor’s policy adviser, Kevin Northey, testified in support and asked the committee for a do-pass recommendation, saying, “Property taxes are too high and need to be reined in.” Northey told members that…