The Idaho Senate approved reform, without debate, yesterday that would give landowners a vote on whether their property taxes can be diverted into urban renewal districts.
The districts are created in areas designated by a city government as deteriorated or underdeveloped. The purpose, as set out by state law, is to promote development by building infrastructure. That's done through property taxes. The district—legally separate from the city government—doesn't increase property taxes, but takes a piece of the pie that would normally be distributed among the school district, county, city and other taxing districts. The district receives only the property taxes resulting from property value increases during the time of its existence, a maximum 24 years.
Up to now, URAs—like Ketchum's—have been created by city governments without voter approval, even though property taxes are diverted into them and spent.
Bill 95, passed by Senate yesterday, would prohibit newly created URAs from having any power without a citywide election approving them. The bill isn't retroactive, however, and wouldn't force Ketchum to hold an election over its existing URA.
The bill also shortens URA life spans to 20 years and requires owners of agriculture land to provide written consent before being included. It also limits URAs to roping in more land after they've been created only once. Up to now, there has been no restriction on adding more land along the way.
Ketchum's URA wouldn't have to take out the 138 acres of Sun Valley Co. land at the base of Bald Mountain's River Run side that it added last year.
Michelle Stennett, D-Ketchum, acknowledged her constituents as being split over the reform.
"Any way I vote on this is not going to be a good thing," she said, adding that she'll vote for the bill because "a little more transparency is never a bad policy."
She said compromises made in amendments to the bill make it acceptable.
Before this bill came to the Senate, the House overwhelmingly passed it on March 1 after making several amendments. However, it now has to go back to the House since the Senate added more amendments, though most are minor changes.
This is just the first URA reform bill to come down the pike.
"I predict we're not through with considering urban renewal reform in the state," said Sen. Chuck Winder, R-Boise.
The House passed three other URA bills on March 1—bills 96, 97 and 110—but all have been sitting idle in the Senate's Local Government and Taxation Committee, failing to gain the traction they had in the House.
Some members of the Legislature have said more reform is needed to keep URAs in line.
"Does this bill  solve all the problems I and others have with urban renewal?" asked Sen. Diane Bilyeu, D-Pocatello. "No, but it's a start."
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