Keep eye on big URA picture

Urban renewal makes an easy target for those of us who don't like taxes.

Yes, that's just about all of us.

But should it? Are we being fair, are we being prudent, when we clamor for elimination of the laws that permit the use of tax-increment financing - an unwieldy term that assures much misunderstanding right out of the gate - to spur economic development in the short term for benefit in the long one?

Rep. Kathy Sims of Coeur d'Alene recently recommended changes to the way urban renewal agencies function, but Rep. Robert Schaefer, a Nampa Republican, introduced legislation last week that would repeal Idaho's urban renewal laws altogether and require debts incurred by urban renewal agencies to be retired. Schaefer's goal - to funnel more money toward schools, fire departments and highway agencies - seems laudable on the surface. But we think it bears deeper examination.

For the most part, urban renewal encourages developers to improve property that would then generate substantially more property taxes. The encouragement can take the form of grants, but most often it requires developers to pay out of their own pockets for improvements before realizing any longer term advantages.

When the property's value is increased, that ostensibly increases the property taxes generated by the improvement. For set periods - the range of years varies significantly - the additional property taxes coming from the more valuable property go back into the urban renewal agency, rather than to more traditional tax collectors like cities and schools.

Your view of the validity of urban renewal as an economic development tool probably depends upon the projects you're examining. In Coeur d'Alene, the people who oppose McEuen Park improvements probably aren't big fans of the city's urban renewal agency, which last week set aside $11.5 million to pay for some of those improvements. Conversely, citizens who appreciate what John Stone has done with the former brown field at Northwest Boulevard and Seltice Way - property that was not just ugly, but wasn't generating much property tax revenue, either - more likely appreciate urban renewal's efforts to spur positive growth there.

The subject is far too complex to resolve all urban renewal disputes in one brief editorial, but as a fairly frequent urban renewal critic, we urge citizens to think carefully before sentencing this economic development resource to Death Row. As much of a pain as it is to see the increased property taxes flowing back into urban renewal districts - taxes that will help fund further improvements within those districts - remember that when the district closes, all the property taxes within that district will return to the original taxing entities, like schools, fire departments and highway agencies.

Urban renewal is a prime example of short-term pain for long-term gain. Urban renewal districts have limited lifetimes, but the additional property tax revenue they'll generate can last for generations.