The real tax impact of urban renewal

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John Austin is wrong; Dan Gookin is wrong; Tony Berns is wrong; Mary Souza is wrong; Kathy Sims is wrong; Mike McDowell is wrong; Cliff Hayes is wrong; and any other person who has stated an opinion regarding the tax impact of urban renewal districts on taxpayers located outside of any district is wrong.

How is that possible? How can everyone be wrong when talking about the impact of tax increment financing? Because it is nearly impossible to accurately analyze the true tax impact of any urban renewal district.

To do so would require the ability to travel back in time and see what would have happened if the district had never been created. This could be called the George Bailey effect, after the Jimmy Stewart character in "It's a Wonderful Life." What would Coeur d'Alene look like if there had never been any urban renewal district created? No one knows. We do know it would not be the same, but how would it differ? Again, no one knows. Many have opinions, opinions based on assumptions, assumptions that are based on few actual facts.

Without knowing what the true impact urban renewal has had it is impossible to correctly state the effect on other taxpayers. It requires making a number of assumptions:

* How much new construction would have happened anyway within the district without any urban renewal?

* How much would property values have increased within the district without urban renewal?

* How much new construction occurred outside the district because of urban renewal?

* How much did property values increase outside of the district because of urban renewal?

* What would the taxable values of the city, county, highway district, etc. be if urban renewal had never happened?

Absent the above information everyone uses assumptions that fit their already determined conclusions. If urban renewal is bad, then they assume that all the value increases within and outside the district would have occurred anyway, and those who are defenders of urban renewal assume that everything happened because of the urban renewal.

The correct answer is neither of the above. It is somewhere in between. Some growth would have happened without urban renewal and some value increases occurred outside of the district because of urban renewal. How much? No one knows. Even educated opinions rely on skimpy facts and a great deal of guess work. The facts also vary project by project, making it even more problematic.

I believe in most cases property taxes are slightly higher outside of districts because of urban renewal. However, I also think it is very possible, in some cases, that property taxes are actually lower outside a district because of the impact of urban renewal.

If you are a supporter of urban renewal don't make blanket statements regarding the zero impact on tax rates outside the district. If you do you are almost certainly wrong. Instead point out the many specific projects that would not have occurred without urban renewal. Support it because it is the one tool given to cities to deal with revitalizing blighted areas, attracting businesses, installing infrastructure, and staying economically competitive.

If you are an opponent of urban renewal, oppose it because you feel government shouldn't subsidize one business over others. Oppose it because the projects they fund don't generate the type of jobs you think they should. Oppose it because they were created with too general of a mission, for too long a term. Oppose it because you feel they operate outside the control of elected officials. Just stop using the scare tactic of higher property taxes when you really have no clue if you are correct or not.

Tom Taggart is a Coeur d'Alene resident, director of Business & Operations of Lakeland Joint School District, and former Kootenai County Administrator and County Auditor.

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