by Cynthia Taggert & r & & r & & lt;span class= "dropcap " & A & lt;/span & rumble grew into an ear-shattering roar in North Idaho this summer as property owners plucked assessment notices from their mailboxes.

Popularity has its price, and most homeowners believe that price equals property taxes. For two or three years, buyers with deep pockets and eyes for investment had paid top dollars for property from Coeur d'Alene to Sandpoint and raised the market value for every property in the region.

"We just watched the assessment double on our land," says Bev Moss, who owns a Coeur d'Alene rental home about a half mile from Lake Coeur d'Alene. "It was a huge shock for us."

Sellers reveled in the Gold Rush atmosphere, but people who had no intention of leaving their homes worried as their property values doubled and their share of property taxes escalated. North Idaho's pleas for property tax relief had fallen on deaf ears in the Legislature for years; the problem didn't affect residents statewide. Lawmakers from other areas saw no reason to change what they judged to be an effective system.

Until, that is, Jim Risch took over as Idaho's governor in June. Risch is the incumbent Republican candidate for lieutenant governor in this year's election. He has good reason to listen to voters statewide, and residents of Idaho's panhandle were screaming in anger. They'd just received this year's assessment notices.

Risch's six-month stint as governor began with the suggestion of, then the call for, a special session of the Legislature on Aug. 25 to consider some type of property tax reform. The news swept through North Idaho like a cooling front after weeks of stifling heat.

"The governor has taken a good step in calling legislators back and saying we can't ignore this issue any longer," says Kelly Richards, executive director of Concerned Business of North Idaho. "I think everyone had the best intentions when they went down last session, but not a whole lot came out of it. This is very positive."

Growth accompanied the rapid jump in market values in Coeur d'Alene and Sandpoint. Word had spread of the area's beauty, lakes, year-round recreational opportunities and small-town atmosphere. Escapees from fast-lane living in metropolitan centers were ready to plunk down whatever it cost for a piece of North Idaho paradise.

Not only did the attention drive up market values, it stressed the infrastructure. More traffic burdened the roads, sewer and water systems and landfills. Property taxes support the districts that take care of those essential services.

State law limits taxing district budgets to a maximum 3 percent increase annually. But it doesn't limit school budgets. Skyrocketing market values shifted a greater portion of support for schools' maintenance and operations from the state's tax-funded budget to property owners. Schools received no more money, but property owners paid much more of the bill for their local school district.

Property owners could see that the trend in market values was nearing the point of unaffordable property taxes. For many, this year's assessments pushed past that point.

"I really worry about the middle-income people, the ones taking home teachers' salaries or priests' salaries," says Moss, chairman of the Kootenai County Democratic Central Committee. "Property taxes are really going to bite them."

& lt;span class= "dropcap " & A & lt;/span & property tax revolt took its first steps in Kootenai County last November. Voters rejected the county's request for help paying for a larger jail. This spring, they rejected the Coeur d'Alene School District's request for a supplemental levy to build a new school and pay for other building projects.

Elected officials were disappointed but not surprised. Property tax alarm was raised in some discussion at every meeting. It was sprinkled into conversations on downtown sidewalks and at family barbecues.

Kootenai County Assessor Mike McDowell knew from appraiser reports that this year's assessment notices would come back to haunt him. He did his best in newspaper editorials, TV appearances and speaking engagements to prepare the population and help people understand that he had nothing to do with increasing market values.

"It's my job to make sure that we pay a fair share of the tax burden. That's based on the fair market value of property," he says. "The weakness is that the ability [of the property owner] to pay is not considered."

McDowell repeated everywhere that the property tax system is a state problem and that only state legislators can change it. The increase in assessments buried his words under numbers that screamed "bankruptcy" to many homeowners.

After assessment notices were mailed, McDowell's office was inundated with calls. Lines of confused people holding their notices snaked out of his office and down county hallways for weeks. He received threats at home. And hundreds of people filed appeals.

The reaction in Bonner County was even worse. Thousands of people filed appeals. County commissioners finally threw up their hands in defeat and rolled back most property values to last year's levels. The bold move raised eyebrows across the state -- many in appreciation but the State Tax Commissions' in disapproval.

If the tax commission decides a county hasn't assessed its market values fairly, it may re-set the values and not allow anyone to appeal.

In an atmosphere heavy with tax revolt, Risch called for a special legislative session for property tax relief alone.

Ideas for relief began to fly immediately. Risch and Republicans proposed funding schools with an increase to the state sales tax instead of with property taxes. Idaho's budget has a $203 million surplus this year. About three-quarters of that money, it was proposed, would go to schools.

In response, Democrats proposed funding school maintenance and operations with $104 million of the state's budget surplus this year and removing the burden from the state's property owners who qualify for homeowners' exemptions. Anticipated growth in state revenue would pay for schools in the future, according to the plan.

"If they increase our sales tax, the net gain from property tax relief will be eaten up mostly for lower-income people and below," says Moss. "The people who really need tax relief will get little."

Another plan floating around proposes reducing by half the property tax contribution toward schools and limiting its annual increase to the same 3 percent that limits all other taxing districts in the state. The state budget surplus would cover the rest.

Risch has made it clear, though, that legislators will consider only one plan during the special session: his. That plan proposes removing the property tax levy supporting schools from all property owners, private and commercial. That alone would save $260 million in property taxes.

Adding a penny to the sales tax would raise $210 million a year. He proposes adding $50 million from the state surplus to make up the difference. Risch also wants to save $100 million from the surplus in a safety account for schools if future economic problems hurt sales tax revenue.

Moss expects Idaho's Republican Legislature to support Risch. But she also believes legislators will alter his plan somewhat before they pass it.

"They certainly don't ever pass something as it's proposed," she says. "There might possibly be an amendment that looks at who really needs tax cuts."

& lt;span class= "dropcap " & L & lt;/span & ocal taxing districts might have a bigger say than the Legislature in that property tax issue.

No plan proposed touches the property taxes that support counties and highway, fire, water and other taxing districts. Property taxpayers have aimed their frustration at those districts as well as the state.

"Relief comes in the form of reduced budgets from all districts," says Richards. "Our call to all taxing districts is not to take the 3 percent they're allowed."

Kootenai County challenged all other districts in the county in July when commissioners pledged to take none of the allowed increase for the 2007 budget. So many county residents appealed their assessments that commissioners had to add a month to their hearing time. The stories they heard in those hearings made a difference.

"We heard the taxpayers. Our budget was driven by reaction to property taxes that each and every one of us is being faced with," says Commissioner Katie Brodie. "There was no argument among us. The goal is to keep the budget at a 0 percent increase while maintaining safety."

The cities of Coeur d'Alene and Post Falls backed away from taking their entire 3 percent allotment after Richards and other city residents spoke up at recent budget hearings. Commissioners in other districts are struggling to find the middle ground between meeting the needs caused by growth and not adding fuel to the fires already raging inside property owners.

"It's a common misperception that new growth pays its own way," McDowell says. "Trust me, it doesn't."

The statewide conversation begun by North Idaho's problems heartens Richards. A change is on the horizon, she says, and the state will benefit.

"People are feeling burdened, and people making the budgeting decisions understand," she says. "They're trying hard to make reductions. They realize that if they want to provide property tax relief, this is the way to do it."

Car d'Lane @ Downtown Coeur d'Alene

Fri., June 18 and Sat., June 19
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