Friday, February 18, 2011

Will Legislature steal the boots from Idaho cities?

In a misguided attempt to micromanage cities, the Idaho Legislature will make itself the enemy of economic recovery in the state if it guts urban renewal laws.

The phrase "urban renewal district" conjures up visions of crumbling buildings and scarred streets with dark alleys populated by addled druggies and dealers.

Yet, that's never been the face of decay in Idaho communities. The reality has been more genteel, with old downtowns becoming decimated by commercial development on the outskirts.

The capital city of Boise was a prime example in the late 1970s when its downtown began to resemble a bomb crater. Revival and creation of what today is an exuberant downtown was helped along by the city's urban renewal agency.

Idaho's laws allow cities to create urban renewal districts and agencies to recoup property taxes generated by new developments that would otherwise be spent outside the city.

The scenario looks like this: A developer invests in building new structures or rehabilitating old ones. As a result, property values in the urban renewal district rise, yielding higher property tax revenues, a portion of which goes to the URA. The agency borrows money to construct roads, bridges, parks, parking garages or other related structures and uses its share of tax revenue to pay off the loans.

Everyone wins. URAs spur development by offering incentives in the form of improved infrastructure whose costs might otherwise fall on existing city taxpayers. Developers profit and cities get economic development and jobs.

URAs cannot live forever and can last only 24 years, so all taxing districts eventually realize higher tax revenues as the result of urban renewal.

What's wrong with all this?

Well, the law works, which apparently chafes legislators who prefer to keep cities poor and government ineffective.

The proposals to "improve" URAs by forcing a public vote on every proposed project, populating governing boards with elected rather than appointed officials, and preventing city council members from serving on the board look oh-so-reasonable on their face. In practice, they would have the intended effect of gumming up operations and rendering URAs useless.

Idaho lawmakers are famous for exhorting others to pull themselves up by the bootstraps.

Yet, when they do, as cities have with URAs, lawmakers want to steal the boots.

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