The House Local Government Committee rejected a plan Thursday that would have brought transparency to how urban renewal districts across the state spend taxpayers’ money. The committee did, however, approve a bill that will limit the police powers of urban renewal districts.

“The purpose of urban renewal was to remove blight,” said Rep. Kathleen Sims, R-Coeur d’Alene. “Nobody has ever found the blight that was supposed to be removed in my city, $40 million later.”

Sims argued before the committee in favor of House Bill 135. The legislation would have required urban renewal districts to hold elections before spending money on projects.

“People think they’re paying taxes to pay for schools and police and fire services,” Sims told the committee members. “In fact, when their money goes to an urban renewal district, much of their money is spent on projects over which they have no say.”

Urban renewal districts are regions established by city and county governments. Districts encompass specific geographical territory, and are given the authority to tax individuals and businesses within that territory. Advocates of urban renewal districts view them as vehicles for economic development in blighted regions. Critics often view urban renewal districts as mechanisms of control and abuse over the residents of the region, with unaccountable authority to tax.

Sims listed several projects undertaken by an urban renewal district in her hometown of Coeur d’Alene, which she said involved wasteful spending. “Once you get an appetite for spending other people’s money, there doesn’t seem to be a limit to it,” she stated. “Bypassing the voters and spending their tax dollars on pet projects is wrong, and I’m asking that we change the law to prevent this.”

Her position, though, was disputed by Ryan Woodings, representing the Capital City Development Corporation (CCDC), an urban renewal district in Boise. “My position is, it ain’t broke, so please don’t fix it.” During open testimony before the committee, Woodings said that the final arbiter of projects undertaken by CCDC is the Boise City Council. He also disclosed that CCDC is the oldest urban renewal district in Idaho, and operates with an annual budget of approximately $12 million.

“I live in Caldwell, and my home is located in one of these districts,” noted Erik Makrush, policy analyst from the nonprofit Idaho Freedom Foundation. He said “85 percent of the property taxes I pay go to the urban renewal district. We need to protect citizens from what seems to be some unbridled power to spend citizens’ money.”

Makrush said that in his community, the nonprofit YMCA receives $1 million a year in urban renewal funds and local voters have no input on the matter. “The YMCA competes against the local Idaho Athletic Club, a private for-profit business that receives no tax dollars. This situation creates a disparity.”

Makrush also noted the disparity between local government agencies, and the spending of urban renewal projects. “A local fire department would have to hold a bond election to build a new fire station,” he said to the committee, “yet there is approximately $240 million worth of bonding that happens with urban renewal projects annually in Idaho without any voter input. This bill creates transparency and accountability.”

The committee, however, rejected House Bill 135. “I’m very interested in this subject, and there are concerns,” said Rep. Lynn Luker, R-Boise. “The bill is flawed, however, and I can’t vote for this.”

The committee did, however, unanimously approve a bill that will limit the police powers of urban renewal districts. “I don’t think I have much more to say today than I did the last time we spoke about this,” Rep. Luke Malek, R-Coeur d’Alene, told the committee.

On Feb. 5, Malek introduced House Bill 137, noting that “currently, urban renewal districts have the power to enter into any private home or business to make an inspection,” and that “this bill strikes the language behind those powers.”

HB137 will now go to the floor of the House of Representatives.

Note: IdahoReporter.com is published by the Idaho Freedom Foundation.