Post Falls on Tuesday joined a growing list of Idaho cities looking to raise property taxes.

The potential 3% increase could raise the city’s property tax revenue by $1.6 million, with $390,000 of the increase coming from annexation and new growth and $550,000 coming from a one-time capital levy.

The increase is expected to cost the owner of a home valued at $650,000, with the homeowner's exemption, about $105 a year.

“So surprise, surprise we got another difficult budget year where we have really high inflation, we have reduced state revenue share and the numbers aren’t pointing in the right direction,” said Deputy City Administrator Warren Wilson to open the budget workshop.

City officials put forth several cost-saving measures.

They are establishing a financial planning model for the general fund; they plan to review city-owned properties and potentially sell off unnecessary property or reduce maintenance costs; and will roll out an employee-led efficiency program later this year.

Wilson presented economic challenges facing the region, citing a 5.9% inflation rate over the past two years. He also said construction is up 4.55% over the past two years. 

He said labor costs are up in Kootenai County, with “all occupations” wages increasing 14.6%, and said the median home price in the Coeur d’Alene area is up 8.6% over the past two years.  

Wilson also talked about insurance premiums, which have “leveled out” this year but have increased dramatically in years past. 

“That’s largely due to things that we can’t control. Hurricanes, large storms, large fires, all of that,” said Wilson. 

He voiced worry over potential increases in premiums next year after fires destroyed much of the Spokane area since Aug. 1. 

He highlighted the city’s growth as a factor in its increased costs. Post Falls has grown to just over 15,500 in population, has nearly 7,800 more calls for service from the police department and has added eight parks and 59 full-time employees since 2017. 

“Because we have growing demands, and we’re struggling to keep up with the growing need for service at the same time, our ability to deliver those services, because of inflationary pressures, is at some kind of all-time low,” Wilson said. 

Wilson also cited shrinking state revenues as another factor to the city's budget woes. He highlighted the passage of HB 967, which allows the state to take $2 million annually from Idaho cities’ and counties’ shares of state liquor tax revenue.

“That’s an annual, ongoing charge,” said Wilson. “It’s a forever charge unless they come back and put it back in.”

Among the city's anticipated expenditures for 2027 is the proposed Post Falls Police Department Expansion Project, which is still being designed. 

The city has a ceiling cost projection for the project of around $14 million.

A public hearing on the proposed budget is slated Aug. 18 at 6 p.m. at Post Falls City Hall, where City Council is expected to vote on the plan.