Idaho's school districts levied $404,419,064 in property tax in tax year 2025, down from $439,394,238 in 2024. That is a drop of $34,975,174, or 8.0%, in one year, and it is real. It shows up on the tax notice.
It was not a spending cut. The state bought the levy down with sales tax.
The vehicle is House Bill 292 (2023), which did not become law by signature. The Governor vetoed it on 27 March 2023. The House overrode 58 to 12 and the Senate 28 to 7 three days later, entering the books as Session Law Chapter 200. Idaho's largest property tax mechanism of the decade exists over the objection of the executive.
What HB 292 actually built
Two accounts, funded by continuous appropriation rather than annual budgeting. The School District Facilities Fund, new Idaho Code section 33-911, takes 2.25% of all sales tax collections under section 63-3638(18) for fiscal year 2024 and every year after, plus 20% of the tax relief fund under section 57-811(2) from fiscal year 2025 on. House Bill 304 (2025) added a further $50,000,000 a year to that fund and $50,000,000 a year to the homeowner property tax relief account, both ongoing.
The deduction is not optional. Section 33-911(3) requires that money received by a school district "must be deducted from a school levy that would otherwise have been paid by property taxpayers," and section 33-911(4) requires the saving to be printed on each property tax notice as "tax relief appropriated by the Legislature."
The fund has grown fast. Relief delivered through it went from $97.7 million in tax year 2023 to $215.2 million in 2025, about 120% growth in two years.
| Tax year | School District Facilities Fund | Homeowner relief | Additional relief | Total |
|---|---|---|---|---|
| 2023 | $97.7M | $191.8M | $24.6M | $314.1M |
| 2024 | $128.4M | $117.8M | $0 | $246.2M |
| 2025 | $215.2M | $112.8M | $0 | $328.0M |
School facilities relief more than doubled while homeowner relief shrank $79.0 million.
The 2025 waterfall
The Tax Commission publishes the arithmetic. Tax year 2025, statewide:
- Property tax budgets before any relief: $2.502 billion
- Less School District Facilities Fund levy reductions: $215.2 million
- Budgets as approved and levied: $2.286 billion
- Less homeowner's tax relief: $112.8 million
- Final cost to taxpayers: $2.174 billion
Statewide levied property tax still rose 4.0% in 2025, to $2,286.4 million. The school line fell 8.0%. Counties rose 5.5%, cities 6.2%, highway districts 6.2%, all other districts 12.2%. The composition changed more than the size.
Dispersion is extreme. Within that 8.0% school decline, West Ada School District 2 fell 95.4%, a drop of $17,683,538, while Boise School District 1 rose 24.1%, up $30,419,460.
The caps that make the shift visible
Idaho Code section 63-802(1)(a)(i) limits a taxing district's annual property tax budget to the highest amount certified in any one of the three preceding tax years, increased by a growth factor of not more than 3%. The base is the highest of three years, not last year.
Three named leaks sit on top of it. New construction is added at 100% of the new construction roll, worth $30.6 million of the 2025 increase. Annexation is added at 90% of certified annexation value, worth $0.8 million. And a district that declines an allowable increase banks it as forgone under section 63-802(1)(e), then levies it in a later year on top of that year's normal increase, with recovery capped at 1% a year for maintenance and operations or 3% of the annual budget for capital projects. Net use of forgone added $7.3 million.
Forgone is the part taxpayers rarely see. It is a standing authority to raise taxes later without fresh justification, and the statewide available balance was about $132.7 million as reserved at 11 December 2025. The City of Idaho Falls, in its FY2027 proposed budget (Idaho cities run 1 October to 30 September, so nothing there is adopted), shows a forgone balance of $5,527,161 and a planned use of $888,354.
The homeowner side
The homeowner's exemption is the lesser of $125,000 or 50% of the market value of the homestead and up to one acre, and it has sat at $125,000 since 2021. The circuit breaker, formally the Property Tax Reduction programme, pays $250 to $1,500 for qualifying owners whose 2025 income after medical expenses was $39,130 or less.
The statewide average property tax rate in 2025 was 0.552% of taxable value, measured after school relief but before homeowner relief, down 4.1% year over year, with rates falling in 34 of Idaho's 44 counties. Taxable value rose 8.4% in the same year, which is the other half of why rates fell.
Scale is uneven. In 2025, 45 districts levied more than $10 million each, while half of all levying districts levied less than $163,594.
Where the cost went
This is the part the tax notice does not print. A school levy is local, visible and often voted on. The sales and income tax replacing it is none of those, and it lands in a general fund Idaho held flat.
Idaho's FY2027 original General Fund appropriation is $5,621,837,100, up $5,978,900, or 0.1%, from the FY2026 comparison basis of $5,615,858,200. Inside that flat total, the Division of Medicaid's FY2027 General Fund original appropriation is $1,047,899,300, about 18.6% of the General Fund.
To hold the line, the FY2027 maintenance appropriation bill S1435 cut the Department of Health and Welfare's ongoing General Fund appropriation by 4.5%, a 2.7% reduction all funds. To reach a 3% General Fund cut, the Division of Medicaid imposed a 4% across the board provider rate reduction with named exemptions, an ongoing base saving of $2,995,200 General Fund plus $5,968,400 federal, $8,963,600 in total.
State employees got no salary increase at all. The Change in Employee Compensation Committee did not meet in the 2026 session and no FY2027 salary increase was funded. What rose was the employer health insurance appropriation, up $2,040 to $16,170 per full-time position, an increase of 14.4%. The statewide authorised position cap fell 131.89 to 21,149.93.
Idaho can carry the shift. Estimated major reserve balances at the end of FY2027 are $1,231.421 million, which the Legislative Fiscal Report puts at 21.8% of estimated General Fund revenue of $5,639.7 million. That is also the first projected decline in the series.
Colorado does the same size of thing, backwards
Colorado moves roughly the same money and makes it maximally visible. Legislative Council Staff forecast in June 2026 that FY2026-27 revenue subject to TABOR will be $20,987.5 million against a Referendum C cap of $20,504.5 million, leaving $483.0 million above the cap and a refund obligation of $329.9 million after a $153.1 million prior-year over-refund adjustment under HB 26-1419. Those are forecasts, and the refund is paid during FY2027-28.
Colorado's mechanism touches local property tax not at all. It caps state revenue and hands the overage back. It also does not fire every year: the same forecast projects a $0.0 refund obligation for FY2025-26, because revenue falls short of the cap.
Nearly the same dollars, opposite plumbing. Idaho's relief shows up as a smaller line on a school levy. Colorado's shows up as a cheque.
Fact-check notes and sources
- Property tax figures come from Market Values and Property Taxes for 2025, Idaho State Tax Commission, EPB00132, 22 December 2025 (Tables 1, 2, 3, 5 and 7). Those are calendar tax years, not fiscal years: 2025 means taxes levied in late 2025 and payable through June 2026.
- Basis matters in that report. The $2,286.4 million statewide figure is measured after facilities fund reductions but before homeowner tax relief, which is why it does not equal the $2.174 billion final cost to taxpayers. Three statewide change figures appear on three relief bases, and they are not interchangeable.
- Statute cites: cap, new construction, annexation and forgone at Idaho Code 63-802; homeowner's exemption at 63-602G; facilities fund at 33-911, 63-3638(18) and 57-811.
- HB 292 (2023) status history, veto and both override votes, is from the Idaho Legislature's bill status page. Summaries describing it as signed are wrong.
- State budget figures are Idaho FY2027 original appropriations, General Fund basis unless stated, from the 2026 Idaho Legislative Fiscal Report. FY2027 is enacted. The Idaho Falls forgone balance is from that city's FY2027 proposed book; Idaho city FY2027 budgets are in hearing, not adopted.
- Colorado TABOR figures are forecast, from the Legislative Council Staff Economic and Revenue Forecast of June 2026, Tables 10A, 10B and 10C. The $483.0 million is the surplus; the $329.9 million is the refund. Using the surplus as the refund overstates it.
- The 2026 Idaho session added no new statewide relief dollars. Its property tax bills were structural: HB 959 raised the fire and ambulance new-growth allowance from 8% to 15%, and HB 843 removed proration of the homeowner's exemption.
Related reading
- Colorado and Idaho state budgets, side by side: what each general fund buys, and which line grows fastest.
- Colorado and Idaho city budgets and public safety: how much of a city general fund police and fire consume.
- Colorado and Idaho local taxes: the levy stacks, mill by mill, including districts outside the city budget.
- Public money programs index: the running index of budget breakdowns here.
This post is informational, not legal, financial or municipal advisory advice. Budget figures are appropriations as adopted or proposed and change through the year. Mentions of named municipalities, districts and retirement systems are nominative fair use. No affiliation is implied.
