In early December, the city of Boise will decide whether or not to accept the Capital City Development Corporation’s proposal for a new urban renewal district. What residents of the city should know is that the proposed Gateway East District will raise property taxes, specifically for those city residents who are not living within the proposed district’s boundaries.
The formation of an urban renewal district creates a zone where future development only financially benefits the urban renewal district, not the city, county, or school district. When a district is formed, all increases in property taxes on the land in that district goes towards urban renewal projects, like the expansion of infrastructure, to entice development. The city does not see any of that increase for twenty years.
Let me offer an example. Imagine an urban renewal district is created. Within the district is a vacant parcel of land. A company buys that parcel and builds ten stores on it.
Now, the previously empty lot has ten buildings on it, so it has skyrocketed in value. However, as far as tax collection is concerned, the city can only tax that lot as if it were still just dirt, whereas the urban renewal district can tax it as a lot with ten stores, receiving more money than the city.
Initially, this may just seem like a way to reapportion tax money, of no concern to anyone outside of the government. However, this reapportioning actually affects all the city residents outside of the district.
Now that there are ten stores on this plot of land, well…those stores could catch on fire. Or, there could be a burglary in one of the stores, requiring the police. Additionally, employees in several of the stores, who live in nearby housing, could have children who need to go to school.
None of the increased property tax dollars from this development support city-provided fire and police services or school district education services. However, the urban renewal district continues to receive fire and police services, and residents’ children still attend public school. And someone has to cover the portion of those costs that are not going to be covered by the residents of this district. That “someone” is the rest of the taxpayers in the city, via increased property taxes.
If this were just one ten-store plot of land, the amount of taxes pushed onto other taxpayers would be miniscule. But, if the Gateway East District is created, it will encompass 3,206 acres. Of that, the Capital City Development Corporation has already disclosed that 1,200 acres could be developed.
A thousand acres of businesses that need city services but won’t be paying for them equals bad news for all other, non-district Boise residents. Property taxes will go up as each development goes in.