The Idaho Press-Tribune has published an editorial titled “Magic of urban renewal ignores its realities” by Caldwell Guardian writer Paul Alldredge.
Caldwell Mayor Nancolas’ use of the phrase, “…magic of urban renewal” was appropriate, though I doubt he fully intended it to be so.
As magicians will tell you, there is no such thing as magic as most people see it. “Magic” is the result of the processes a “magician” uses to deceive his audience by exploiting and manipulating their cognition. For a very readable explanation of this, I highly recommend the book “Sleights of Mind — What the Neuroscience of Magic Reveals About Our Everyday Deceptions.” The authors use “magic” as a vehicle to explain how we (our brains) are deceived.
“Sleights of Mind” is written by Ph.D.s Stephen L. Macknik and Susana Martinez-Conde of the Barrow Neurological Institute at St. Joseph’s Hospital and Medical Center in Phoenix, Arizona. The book’s cover is in the photo.
“Magic” is thus an accurate term for the process that some abusers of urban renewal use to deceive others into accepting “free money.” Mayor Nancolas was right on the money.
It was a great article. I think the Mayor of Caldwell posts here on Opencda under the moniker of John A. It was like hearing as echo.
Comment by Ancientemplar — January 27, 2011 @ 9:15 am
Funny, Ancientemplar. What you’re probably seeing is that mayors and city councilmen, and potentially legislators, don’t fully understand urban renewal. Few people do. So what they do is repeat the malarky of the Urban Renewal apostles.
Comment by Dan — January 27, 2011 @ 10:30 am
Actually, ancient, he’s my dad.
Meanwhile, the author’s brilliance is reflected in this jewel: “(taxing districts) have no choice in meeting the increased demand for essential city and county services and have to increase levy rates.”
Ah, as anyone knows who follows taxation in Idaho, taxing districts have no ability to raise levy rates. If he had said those districts had fewer revenues to cover increasing needs, he’d have been right. Instead, his statement about levy rates does nothing more than diminish his argument, and for those of you against urban renewal, that’s never a good thing.
Comment by JohnA — January 27, 2011 @ 2:43 pm
“Ah, as anyone knows who follows taxation in Idaho, taxing districts have no ability to raise levy rates.”-JohnA
John, I just got off the phone with my good friend, Marv Lekstrum. Marv is a Lakes Highway District commissioner. He informed that me that individual taxing districts do have the ability to increase their levy rates. He said they can take 3% plus new construction, and that the Lakes Highway District voted to take their full 3% this year. I am just now beginning to educate myself on taxation in Idaho, so maybe I am confused about individual taxing districts levy rates, as opposed to the particular levy rate you are referring to that they cannot raise. Please provide an explanation as to any difference’s I am missing.
Comment by Steve Adams — January 27, 2011 @ 3:27 pm
Hmm. Does being in favor of “urban renewal” require that one also be in favor of “urban renewal districts”? I am confused, as usual.
Comment by Happy Trails — January 27, 2011 @ 3:33 pm
True. The taxing districts set the budget, then the levy rate is set by the county based on that budget and property values. So it’s proper to say that a taxing district’s actions affect the levy rate.
Comment by Dan — January 27, 2011 @ 3:36 pm
Happy Trails,
No. Urban renewal is a condition change that can come about without the existence of urban renewal districts. Urban renewal can be accomplished by competent and imaginative citizens without the creation of urban renewal districts.
Comment by Bill — January 27, 2011 @ 4:03 pm
Steve, as Dan points out districts’ budgets establish levy rates. The most a levy rate can rise is 3%, IF there is no change in the district’s assessed value and they take their full 3%. New construction does not change the levy rate because the added budget dollars are offset by the increase in the district’s assessed value.
My point about the article is that the author implies that a district can increase their ‘levy rate’ to ‘make up’ for funds flowing to URDs and that’s not correct.
The assessed value of the district does more to change levy rates than any budget action, so any discussion about levy rates up or down is silly. For example, the total levy rate of a typical Coeur d’Alene tax code area in the mid-’90s was 2.5% (the total of all rates in that area from the city, county, NIC, schools, etc). Now, it is rare to see the total levy rate in any tax code area above 1%. That’s because values have skyrocketed well above 3% per year since then, which coupled with the 3% limit to budgets, has driven levy rates WAY down. Indeed, my late friend, Ron Rankin would be chagrined to know that the effect of his 1% Initiative would actually have been to INCREASE taxes in these times of high valuation and low budget increases.
I digress but the fact is URDs have no impact on a district’s ability to increase their taxes, as was implied in the article. And, I’ve shown that taxes paid by individuals cannot go up because of urban renewal. That was even admitted by the so-called expert who testified this week about the damage being done by urban renewal.
Comment by JohnA — January 27, 2011 @ 5:06 pm
Well, John, and then there’s the issue of foregone taxes, which would really help “affect” the levy rate.
Comment by Dan — January 27, 2011 @ 6:09 pm
Ok JohnA,
If x amount comes into my household and I decide to take a job in Spokane instead of here in CdA but there is no immediate result in income, where do you thing the extra gas money will come from? From my children s allowance and other existing areas of my home.
I know this may sound like a silly analogy to you but it IS reality to the rest of us. The money to the URD does NOT show up out of thin air. You can take an idiot and send him to college but you will STILL have a college educated idiot. It is common sense my friend.
Comment by concerned citizen — January 27, 2011 @ 6:41 pm
Dan, you’re right that the foregone tax issue is a formidable one. As you know, the balance grows when governments opt not to take their full 3% and/or add all new construction. The State used it as an incentive to NOT increase taxes unless it is absolutely necessary, allowing the ‘foregone’ taxes to build up as a sort of ‘rainy day’ fund.
When I left in 2000 CDA had built up the largest foregone balance per capita in the state. That happened because Mayor Hassell and the City Council opted to get by on new construction only and not take the 3% allowed. Other governments have large balances also and can access them any time they wish (NIC did that last year).
That is something to watch as budgets are set each year.
Comment by JohnA — January 27, 2011 @ 7:34 pm
You’re right, CC, but JohnA twists the numbers and nit picks around the reality of urban renewal. And the public is finally starting to realize it.
Remember that many states, especially California, are looking to close their urban renewal agencies because of the huge budget impact they can no longer afford.
Comment by mary — January 28, 2011 @ 9:07 am
Hi Dan,
Taxing districts get to remain “revenue neutral” despite fluctuations in assessed valuations and can take a 3% yearly increase. When assessed values decrease the levy rates increse to keep the district “revenue neutral”. Urban renewal keeps taxing districts on a fixed income for the life of the agency..they get none of the increased taxes generated by growth within the UR district. UR is a huge tax shift and forgone tax revenue for schools, streets, fire, parks, water, sewer, mosquito abatement and all the various taxing entities who assesse taxes. Urban Renewal people like to claim they don’t levy taxes but are content to take the total additive levy rates established by all the taxing agencies and apply that to their “increment” of assessed value. It get a little hard to visualize but the bottome line is UR puts all taxing agencies on a fixed income for the life of the UR agency and the shortfall is made up via higher taxes over time for everyone in counties where UR agencies exist. It is PROPERTY TAXES diverted (shifted) to an agency with no voter oversight and is taxation without representation.
The best thing that could happen is the Legislature simply repeal all of Title 50-20. It is a patchwork of laws and modified laws since 1965 allowing all manner of property taxpayer abuses. Everthing done with UR can be done with a General Obligation Bond election that carries the full faith and credit of voters.
Comment by paul — January 28, 2011 @ 2:10 pm
Paul,
What are you talking about, URD’s don’t raise taxes. Just ask those that know. 🙂
It is time for these so called “INVESTORS” to pay for their own for profit ventures. It is also time for impact fees for development. I know people say “Well, they will just past the cost on to the buyer.” If there IS no buyer because the price is to high, the developer will have to lower the price and learn to live with fewer villas throughout the world. Oh darn.
Comment by concerned citizen — January 28, 2011 @ 7:18 pm