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the
PROBLEM Property taxes are the single largest source
separate projects across the state.3 Statuto-
of revenue for Idaho state government
rily, these projects are established to “raise
and local units. Revenues from this source
revenue for the finance and economic
totaled almost $1.7 billion in 2016, account-
growth and development of urban renewal
ing for nearly one-third of state and local
areas and competitively disadvantaged bor-
revenue, the vast majority of which went
der community areas” and “to encourage
towards schools, city services, and coun-
private development and investment in the
ties. That figure represents an increase of
same areas.”4 Yet, urban renewal districts
33 percent since 2007, even though there
can be found everywhere, from the poorest
are statutory prohibitions on property tax
to the wealthiest areas of the state, and in
increases. The restrictions on property tax
any geographic area, not just within border
collections do not mean property owners
communities.
1
2
benefit from them; most property owners have grown accustomed to property tax
Urban renewal districts raise their money
bills that grow by percentages in the double
through Tax Increment Financing (TIF), a
digits annually, attributable to increases in
process that takes any growth in property
market valuations, even if nothing changes
tax revenues and uses that money to fund
with their property. Because of the large
the urban renewal agencies. The process
impact which property taxes have on
for TIF works by first determining the total
numerous Idahoans, and for their especial-
value of property within the boundaries of
ly immense impact on local government,
the district. For the life of the urban renew-
property tax policies need to be reex-
al agency, property tax revenue is divided
amined and any shortcomings must be
into two streams. The first stream comes
reformed.
from the original assessed value and goes towards the original services, such as fire,
One of the most glaring failures of Idaho’s
city, and schools. The second stream flows
property tax policies is the 24 urban re-
to the urban renewal agency. Thus, any in-
newal agencies, which currently oversee 79
crease in property values goes towards the second stream for urban renewal agencies. Though TIF is often sold as “free money”
1 “2016 Annual Report,” Idaho Tax Commission. https://tax.idaho.gov/ reports/EPB00033_12-06-2016.pdf 2 “County Property Tax Budgets: Public Records Request,” Idaho Tax Commission, 2017.
PROPERTY TAX
3 “Urban Renewal Agency Registry,” Idaho Tax Commission, 2017. 4 Idaho Code 50-2902