McLean proposes budget with dozens of new positions, slightly lower than max allowed property tax hike

City of Boise
Posted at 5:05 PM, May 25, 2022
and last updated 2022-05-25 19:05:51-04

This article was originally published by Margaret Camel in BoiseDev.

Dozens of new staffers and support for those already on staff are major priorities for the City of Boise in the next fiscal year.

During a marathon budget work session on Tuesday, Mayor Lauren McLean made her pitch for the next year’s budget to Boise City Council members. There are no firm budget estimates available yet, but McLean is proposing 45 new positions across more than a dozen departments, boosts in pay for existing staffers and a continued focus on affordable housing, sustainability and plans to support Boiseans hit hardest by the impacts of COVID-19.

The budge includes a pitch to take a 2.45% increase to property tax collections, which is less than the maximum 3% allowed under the state statute. This is a lower tax hike than the full 3% McLean opted for last year, but steeper than her decision only to increase taxes on new construction and leaving tax collections otherwise flat in 2020.

The proposals include several high-profile infrastructure projects, including:

The complete budget book will be presented to the public on June 17 and a public hearing will be on July 19.

‘Stabilize our workforce’

Like any company nationwide, hiring and keeping talent is Boise’s number one priority.

McLean’s Chief of Staff Courtney Washburn kicked off the work session saying city department heads were told to focus their pitches for more investment in their departments on boosts to staff. She said the demands for services from the community continues to outpace the capacity city staff has and long-term vacancies are putting pressure on remaining employees.

“The number one priority if you were to ask all of the directors and senior managers is our need to stabilize our workforce,” she told the council. “…We need to meet increasing workload demands by adding staff and we need to remain competitive in the market by retaining the talent we have and recruiting the talent we need.”

McLean is proposing an additional 45 employees in this budget, with the bulk coming from 25 new employees for the Boise Airport in order to keep up with operations as it moves up into its new place as a medium hub. Another roughly 11 employees are proposed for water renewal and eight in parks and recreation. The airport and the water renewal employees are funded by enterprise funds, which means this is covered by the fees of the projects instead of property taxes.

Eight new employees in Boise’s Human Resources department are a significant lynchpin in the plan to help staunch the city’s ongoing staffing issues. Washburn said these new hires will help “right-size” the department to the demands of the city and allow existing staff to focus on recruiting new hires, while the new staffers become specialized support for different city departments to help with planning and other needs.

This budget also proposes a 5.9% cost of living raises for employees, a hike to the city’s minimum wage from $13.53 to $16.15 and a one-time 2.5% increase in performance-based raises available. The inflation rate in the United States hovered over 8% last month, according to the U.S. Bureau of Labor Statistics.

How much is this going to hit your wallet?

Property taxes in Idaho aren’t as straightforward as they appear.

Unlike in other parts of the United States where a simple percentage is applied to your home value to arrive at the amount you owe, Idaho does things differently. Local governments set budgets and then the amount is spread out over every property in a city or taxing district, meaning properties that are becoming more valuable than others shoulder a larger percentage of the burden.

Since Idaho capped its homeowner’s exemption at a fixed amount in 2016, an increasing amount of property tax burden has shifted onto residential homeowners from commercial property. This is because home values are appreciating at a faster rate than commercial property, making homeowners shoulder more and more of the tax burden. Last year, residential property increased in value an average of 29% while commercial only rose in value an average of 19%.

Due to the shift, even if Boise didn’t take any property tax increase the average Boise homeowner with a $564,000 home would pay roughly $89 more than last year. With McLean’s proposed 2.45% increase in property tax collections, this adds an additional $127.76 to this home’s property tax bill next year. If McLean proposed to take the full 3%, it would have cost this average homeowner $8.49 more. graphic illustrating property tax increases explained above.

City Council Member Patrick Bageant noted it’s not just the growing burden shift homeowners are dealing with this year, it’s all of the previous years going back to 2016 compounding together putting so much financial pressure on Idaho’s homeowners.

“It’s not even death by a thousand cuts, its death by a few big whacks with a hatchet,” he said.

Federal COVID dollars get the green light

The City of Boise now has a path forward on how it will spend the roughly $37 million allocated from the federal government in early 2021 through the American Rescue Plan Act. McLean rolled out some of the proposals during her State of the City address last week, but this is the first time council had a chance to hear details and take a vote on the plan.

The proposal, which city staff built after internal work and workshops with the public, includes $12 million for affordable housing projects, $10 million for climate adaptation projects on city buildings, $2 million for wifi at three downtown city parks and $2.6 million for staffing/administrative costs associated with the program. Another $10.2 million will go toward community programs, including a partnership with the Idaho Association for the Education of Young Children to distribute incentive pay to childcare workers, $1.5 million toward a system to distribute local food and $2.75 million for a partnership to provide one on one and group therapy to uninsured Boiseans.

Another $2 million will be distributed to qualifying businesses hit hard by the pandemic in low-income census tracts to help with recovery. Unlike the city’s previous small business assistance program, this assistance would be given out as a cash payout instead of a more complex system for being reimbursed for expenses of adapting to the pandemic. It will be administered in partnership with the United Way of Treasure Valley.

City Council President Pro Tem Holli Woodings commended city staff on the slate of projects coming forward to use the ARPA funds on, noting they were one-time projects that boosted the capacity of existing partnerships. She said using these funds to build on existing foundations will be highly effective and meets the federal government’s requirements for the money.

“I think the pandemic showed us where our weak spots are and the intention of this funding was to address where those weak spots were found,” she said. “I think this overall financial plan gets into those little weak areas. I look forward to seeing how this creates resiliency.”

City Council Member Luci Willits was the only vote against the ARPA plan. She called the money “a once in a lifetime opportunity,” but said she couldn’t feel comfortable supporting it without firmer details about how investing in these programs now would obligate the city in the future.

“My concern is we are making long-term commitments with short-term money even if the ideas might be exceptional,” she said. “It’s hard for me to vote yes before seeing the big picture of the budget.”