Urban renewal districts in Lewiston and Moscow would lose as much as 39 percent of their annual property tax revenues under a legislative proposal released for comment this week. The plan could cost Boise's agency 18 percent,
The plan would phase out the $141 million business personal property tax over six years. The state would reimburse local jurisdictions for about two-thirds of that revenue; however, urban renewal districts are specifically excluded from those payments.
Since the districts are established with local government approval - and since they divert property tax revenue from those local governments - some lawmakers feel it would be inappropriate to replace the lost revenue with state tax dollars.
The move would reduce by about $1.5 million the money Capital City Development Corp. in Boise's receives from 2012 taxes, CFO Todd Bunderson said.
It would cut property tax collections in Moscow's Legacy Crossing urban renewal district by about 15 percent over six years. The Alturas Technology Park would lose 23 percent, or about $86,000 per year, according to a 2012 report from the Idaho State Tax Commission.
Lawmakers are often skeptical about the benefits of urban renewal districts, but Lewiston Community Development Director Laura Von Tersch said they're one of the few tools cities have for replacing and improving infrastructure. They capture incremental tax revenue from new development and increasing market values and reinvest that money in the district.
Lawmakers debated an unrelated bill Thursday that would have made it more difficult for urban renewal agencies to establish new districts.
The House Local Government Committee killed that measure on a 9-4 vote.