When is a tax not a tax?

Cities and counties use a method allowed by law to impose or increase taxes without asking the tax payers permission. It is entitled "Tax Increment Funding" or TIF. TIF is the funding mechanism used by Urban Renewal. The use of TIF confiscates any new property taxes within an urban renewal district and uses those taxes to improve, expand or develop within that district. The cities and counties explanation for using TIF is that they are redeveloping areas of decaying properties which reduce values to improve the tax base and develop infrastructure for new development. They state that the new property tax money urban renewal uses was not there before they formed the district and therefore is new money and does not come from the property tax payers. This is a patently untrue statement there are multiple taxing districts using property tax to provide their required public functions of maintaining and servicing the areas of a city and county. When the property tax to provide their public function is taken for urban renewal, these tax districts compensate for the loss by raising their levy rates and the cost is passed directly to the property tax payers of that city and county.

These taxing districts are cities, counties, highway districts, canal companies, ambulance, etc. and they are required to provide not only their public function but also fire and police protection to urban renewal areas even when not paid to do so. The costs to provide these services are paid by increasing the property taxes of the citizens of those communities for the life of the urban renewal area which is 20 years.

The property tax an urban renewal area uses is a "direct tax" imposed on the citizens of that city and county even if the cities and counties say it is not. In Kootenai County from 1994-2013 property tax payers have paid an imposed additional $85,752,249.00 which you will continue to pay for the next 20-plus years. These expenditures should have been approved by ballot, as required by the Idaho Constitution, not forced as a tax upon the taxpayers.

I have on record the email responses from Ada, Canyon, Minidoka and Kootenai County assessors confirming that the money paid to an urban renewal agency via TIF funding is shifted to and paid by the property taxpayers of the city and county where the urban renewal agency is located. Bannock County did not respond.

This information was developed by the Tax Accountability Committee of Idaho in preparation for the upcoming Legislative Interim Committee on Urban Renewal meetings to be held during August 2015 has rewritten and amended the Idaho statutes in an attempt to curtail the abuse of urban renewal in the state of Idaho. We encourage the public to become involved by contacting your legislators, mayors and city council.

Ronald M. Harriman is chairman of the Tax Accountability Committee and nonprofit Idaho legislative issues committee.