OPINION: PHIL WARD — With URDs, it’s all about the pie

Making a really good pie takes patience. Who gets a piece is a choice. What have you done to deserve a slice of the pie?

Last week I attended a meeting at the Coeur d’Alene library on Urban Redevelopment Districts (URDs). It wasn’t a discussion but a time for those who oppose URDs and specifically their funding to discuss how unfair such districts are in their minds.

The talk began with Steve Matheson, Kootenai County treasurer, three commissioners, one from Hayden, Coeur d’Alene, Post Falls and a homeowners association spokesman. All four object to the city of Coeur d’Alene URDs, particularly the Health Corridor District, apparently because they believe that due to tax increment financing, Kootenai County and various taxing districts are being deprived of some “potential” tax revenue, their piece of the money pie.

Tax Increment Financing (TIF) has become the most popular incentive tool for economic development in the United States as the federal government has decreased its urban development spending as explained by City Lab in October 2019. State legislatures authorize and set conditions for the creation of a URD and the use of TIF by local governments. Cities like Coeur d’Alene and counties may then create a URD which utilizes TIF.

If the URD is working as intended, property values will increase over time due to infrastructure upgrades and other investments resulting in URD property creating more money in taxes. All growth in tax revenue during the TIF period, known as the tax increment, is used to finance URD redevelopment.

TIF is often used to lure major private-sector developments as part of “incentive packages.” Numerous large retailers seek tax incentives to locate in a community, including such stores as Walmart and others. These incentives are intended to bring jobs and economic benefits to the larger community, not only the URD.

URDs have been used to clean up brownfield sites which then allow private development to occur. These developments hopefully create improvements within the district resulting in countywide benefits. Once the TIF period ends, all tax revenues, including the increased revenue, will flow to all taxing authorities including Kootenai County.

Unlike unpopular bond initiatives or tax hikes, TIF can be implemented without direct input at the ballot box. The people know the money goes for public improvements within the district whereas bonds and levies generally require an added tax mileage rate to their property tax bill which is often voted down.

Various cities within Kootenai County have created URDs including Hayden, Post Falls, Harrison, Spirit Lake and Coeur d’Alene. In Coeur d’Alene, ignite cda is the redevelopment agency which operates with oversight by the elected Coeur d’Alene City Council.

Generally, developers who are not prone to taking risks will only invest in certain areas if a redevelopment district exists. When public improvements occur, the likelihood of private developers investing increases greatly. This is the concept behind Urban Redevelopment Districts and the use of Tax Increment Financing. These districts are not necessarily blighted areas which we may envision as impoverished and crime-ridden. Oftentimes, redevelopment occurs in areas that are stagnating economically or not keeping up with the overall community.

The idea is that when the URD is successful economically, it results in increased property values. If that does not happen, then there is no tax money lost or gained.

As a point of information over the past several years, Kootenai County has had significantly lower property tax rates than the other counties in Idaho with more than 100,000 population, according to the Idaho Tax Commission. The Kootenai County Treasurer’s website states, “Kootenai County is proposing a 1.5 percent property tax increase for its fiscal 2019 budget, but officials estimate most homeowners would see a $22.66 reduction per $100,000 of home value in the county portion of its taxes…”

Keep in mind property tax assessments are based on the market value of your home. The taxes you pay are based on the mileage rate set by our elected commissioners. Contrary to the claims of people who should know, apparently URDs are not creating a greater tax burden for Kootenai County. Just for the record the city of Coeur d’Alene contributes $22 million-plus in property tax revenue to Kootenai County, which is approximately 25% of the entire $100 million Kootenai County budget, according to the county auditor’s report.

Coeur d’Alene residents don’t get to vote on one penny of how that $100 million is spent. We trust the three elected county commissioners and the other elected officials to act appropriately.

There certainly are some problems with the Idaho statute on URDs which need to be addressed in Boise, not in Coeur d’Alene. Perhaps a share of the increased tax money could be set aside for affordable housing or even to assist individual homeowners within the URD with major home repairs, such as a roof. I would feel better if the critics were trying to make the state statute better rather than dividing the community. My only question to those claiming a tax increase being necessary which doesn’t appear to be happening is, when do you have enough? The city of Coeur d’Alene and Kootenai County need not be divided but must work together to maintain our quality of life.

This creation of Urban Redevelopment Districts using tax increment financing has worked well across our country and in the city of Coeur d’Alene, resulting in improving our community with public parks and redevelopment of prior mill sites such as Riverstone and Atlas Mill. TIF helped bring the theaters to Riverstone as part of the initial development with infrastructure improvements.

Coeur d’Alene in partnership with ignite cda is creating a public waterfront area with walking and biking trails, a park, water access areas, public parking and a mixed use development on the former Atlas Mill site. Although these uses are located within the URD which is within the city of Coeur d’Alene, anyone can benefit from the use of them.

Kootenai County has the same authority to create redevelopment districts as some cities have done. As we have seen, the URDs in Coeur d’Alene do not limit benefits to city residents but often serve the entire county. Sharing the pie is a good thing but requires each of us taking only our fair share or perhaps creating a pie of our own.

Improvements without an added mileage rate on our tax bill what a novel concept and that’s why tax increment financing has been utilized for years all across our country. As the saying goes, “if it ain’t broke, don’t fix it.”

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Phil Ward is a Coeur d’Alene resident.