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Monday, December 27, 2010

Lower Taxes by Reigning In Urban Renewal

Here is a OP-ED piece written by our friend Wayne Hoffman of the Idaho Freedom Foundation.  Mr. Hoffman has given us permission to post his work on THE GUARDIAN BLOG.

"Earlier this month, a group of city elected officials in Idaho voted to cut taxes. How did they do it? And how can state legislators apply the same strategy to cash-strapped taxpayers statewide?

By fixing the state’s urban renewal laws.

First, an explanation of how Idaho taxpayers have been robed blind by urban renewal and its higher taxes. Let’s say we have a city in Idaho called Emerald City. In Emerald City there exists an urban renewal district. That district includes an acre of bare ground valued at $5,000.

The urban renewal district encourages a developer to put a building atop the bare ground. Now that acre of land is worth $500,000. The taxes from the increase in the valuation — the $495,000 — goes to the urban renewal district to use for their “economic development” projects.

The county, highway district, city or ambulance district — none of these entities gain from the increased valuation. As far as those taxing districts are concerned, the property is still valued at $5,000. However, because the city, county, highway district and ambulance district must still provide services to the new building, those taxing districts must increase their levies in order to bring the revenue needed to account for the increased services.

Meanwhile, Emerald City’s urban renewal district sets about its urban renewal projects. So while the local taxing districts can’t afford to hire the firefighters it might need, or has to raise tax levies to do so, the urban renewal district is putting money into arts, loans and grants to private companies and into new public buildings that would normally have to be approved by voters, were it not for the fact the urban renewal district were doing the work.

There’s virtually no limit to what an urban renewal district can’t do under state law, and little oversight because urban renewal boards are not elected. Taxpayers pay for all of this spending, much without their knowledge. Construction is occurring in town, but their tax levies keep going up. Taxpayers are at a loss as to why.

The taxpayers ask the urban renewal people if they’re to blame for higher taxes, to which we’re told the answer is no.

In truth, urban renewal does cost taxpayers. It does result in higher taxes, and here’s more evidence: The Pocatello City Council voted two weeks ago to get rid of one of its urban renewal districts. That move freed $83 million in property valuation (called tax increment) that had been locked up and applied to urban renewal. Pocatello leaders said the elimination of this urban renewal district would result in a 3.5 percent cut in taxes. Tax dollars that previously went to urban renewal are now directed to city services.

Collectively, urban renewal is spiriting away $52 million in taxes for specious projects in more than 60 Idaho urban renewal districts.

Mayors across Idaho like to tell Idaho taxpayers they’re getting something for nothing with urban renewal, that no taxpayers are harmed in the making of urban renewal districts. Our experience in Pocatello tells us that such statements are pure fantasy.

Idaho lawmakers have a chance next legislative session to rein in urban renewal, to stop Idaho taxpayers from being swindled out of their tax dollars and to apply Pocatello’s experience to the rest of Idaho. If lawmakers are looking for a good way to cut taxes statewide, here’s their golden opportunity."

 Wayne Hoffman is the executive director of the Idaho Freedom Foundation. E-mail him at


  1. Wayne, they like the way it is. We don't get to vote on anthing done by urban renewal agencies. The reason is simple...none, or very little of their PORK PORJECTS would ever get done if they had to stand for voter approvals.

    They can spend our money without any interference (oversight) and they want to keep it thie way. We can only hope the Idaho Legislature will stand up and fix this.

  2. I am going to move from Caldwell to Pocatello!

  3. I'm looking at leaving Caldwell as well.

  4. Caldwell really looks like a dying town. TVCC won't do much to bring jobs here. The Christmas lights on Indian Creek certainly won't provide additional jobs. The high taxes that the city "leaders" have imposed on the taxpayers will keep the people that could bring private investment and jobs, from coming. Caldwell has the highest property tax in the area. These short sighted "leaders" have really fouled this place up! I see no end in sight to the decline of Caldwell, until the current city "fathers" are voted out of office. These guys just are not very smart!

  5. Caldwell's property taxes are a deterent to new business growth. Commercial property in Caldwell is way out of line in what has to go for property taxes. All urban renewal has done is kill of marginal operations by pushing their owners over the cliff and out of business.

  6. Thats cuz Caldwell is a dying town. Let it die and become a town of retirees with no growth. Every one would be happier.

  7. GA says..

    If all the whiz-bang projects paid for with property taxes from urban renewal are so very good then let people vote on them and agree to fund them. Urban Renewal is just a legal way to get around voters and a lot of fly-by-nite spending of our money without our approvals.

    The paper had a good description of gets around representative government. Even the Chairman of Revenue and Taxation Dennis Lake agrees it is out of control.


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