What is Urban Renewal?
Originally, Urban Renewal (or Urban Development) was designed to improve blighted and deteriorated areas of cities. It seeks to circumvent the funding limitations of municipalities in their attempts to incur debt for such worthwhile ventures. Urban Renewal has its proponents as well as its opponents. It is tied to the question of property taxes and thus complex and not easily understood.
Proponents tend to exaggerate the potential benefits of URD (Urban Renewal District) and minimize its risks and negative aspects, often leading to misleading and outright false statements. For example, some say URDs have no impact on property taxes paid by businesses and individuals. Clearly, that is false. In Idaho, the maximum duration of a URD is 24 years. During those 24 years, the impact on the taxpayer is higher property taxes. Tax dollars that would ordinarily pay for services to the community (cost of local government) are siphoned off to the URDs. And that additional cost is borne by ALL the taxpayers of the county who have NO say on how their tax dollars are being spent.
During the life of the URD, the value of the land within its stated boundaries at the year of inception of is added to the current value of the land outside its boundaries. That valuation is used to determine the levy rates which are then used to calculate the property taxes that will be distributed to each of the 48 taxing districts. Taxing district budgets are not changed; they receive their money according to their budgets. Any difference is made up by all the property taxpayers in the county. In Kootenai County (tax year 2010-2011) 7.19% of property taxes are diverted to URDs and all the taxpayers of the county must make up for that difference. And, keep in mind the amount of taxes distributed to URDs is growing rapidly and there is no ceiling. LCDC, the Urban Renewal Agency for Coeur d’Alene had receive more than $21,000,000 from property tax dollars…and everyone in Kootenai County has paid for that.
On the positive side, URDs can result in net benefit to the taxpayers, especially when used to replace or develop infrastructure to attract private development that will then add to the tax base. Also, there is clearly a benefit in investments for direct community benefit such as libraries and the like. Also, net taxable value of property in Coeur d’Alene has increased some 55% since 2004. It is difficult to say with any degree of credibility however, which project and to what extent they have actually provided value to the community. Proponents tend to make overly enthusiastic claims about such impact. A number of claims have been made for example to include private development projects that have no immediate connection to URD efforts in their assessment of benefit. In such cases, there may well be some incidental and indirect benefit, but to attribute to the URD full benefit for all property value increase stretches credibility and raises suspicions.
Clearly, URDs can be beneficial to the community. (Refer to page 14 of powerpoint pdf "Urban Renewal - Fact from Fantasy" document) The key question seems to be are we, as property tax payers, better off spending this money at this time on Urban Renewal or, would we be better off in these difficult time of economic uncertainty (as we may be facing even more uncertainty in the future) be better off focusing on our current obligations? We, the public should have the choice. Unfortunately, at this time we do not. Our only practical choice is to take up the issue with the Legislature.
Historically, our public spending has tended to be ‘needs-driven.’ That is, we identify needs and desires and from them determine a budget to satisfy them. The URD concept is seen as changing that outside the direct awareness and approval of the public. There is a danger that our local government, using the funding provided by the URDs could become ‘money-driven.’ That is, local government would thus be looking for a way to spend ‘all this windfall’ and needs become a lower priority consideration. The state of California, with its 400 URDs is experiencing this and many now are convinced that the URDs have in fact contributed to the state’s out of control debt problems.
>> Urban Renewal - Fact from Fantasy, by Frank Orzell
pdf printable version of powerpoint presentation
LCDC - Lake City Development Corp.
Coeur d'Alene's local Urban Renewal Agency
www.LCDC.org
Urban Renewal Areas encompassed:
Coeur d'Alene has two URD districts.
The Lake District & The River District.
Click Here for districts >> http://lcdc.org/districts/.
Total tax revenue collect by CdA URA to date:
$30 Million since 1997
See LCDC website www.LCDC.org.
Projects Funded:
Lake District Projects - click here for Lake District Projects on www.LCDC.org
River District Projects - click here for River District Projects on www.LCDC.org
If you do not see what you are looking for you can request specific information directly from Tony Berns at Lake City Development Corporation. Information is provided per a public records request. (208) 292-1630
Idaho Urban Renewal Statutes:
>> Title 50, Chapters 20 and 29 - link economic development act
Our Idaho:
Report finds Urban Renewal sighons $52 Million from Idaho taxpayers (2009), little benefit...Theft as Urban Renewal: Why Idaho Should Repeal the Local Economic Development Act.
Randall O'Toole
Senior Fellow and Policy Analyst
CATO Institute
>>Click Here for article<<
www.ouridaho.com