Tax-Increment Financing Put To Post Falls Voters Referendum To Decide Leeway City Has In Luring Developers
A Tuesday election here on tax-increment financing has become a referendum on growth and the public’s faith in elected leaders.
The question posed at the polls is simple: Should residents be allowed to vote each time Post Falls offers tax-increment financing to developers?
No, say city officials, business leaders and many residents.
Yes, say other residents - more than 1,000 of them - who signed initiative petitions circulated by the Kootenai County Property Owners Association.
False claims of tax reductions and tax hikes, from both sides, have muddied the debate. So, too, has confusing baggage attached to the ballot measure:
It calls for a 120-day moratorium on construction in special zones where development is deemed eligible for tax-increment financing. No such areas exist, yet, but Post Falls is about to create at least one. A massive plant proposed by Micron Technology Inc. and International Expo, a proposed megamall and entertainment center, could be located west of town near the Washington border.
The moratorium is aimed at preventing the city from extending tax help to a developer without public approval.
Resident Robert Nordby, a retiree, favors the use of tax-increment financing and he trusts the city to use it wisely. He’ll vote “no.”
“I’m all for it. I think it’ll help us bring in more tax revenue,” Nordby said. “We may not see the money right away, but it’ll help.”
Resident Paul Beghtel, however, said the initiative gives him a chance to vote against runaway growth in town, even though growth is not the issue on the ballot.
“We’re growing too big, too fast,” said Beghtel, saying he’ll cast a “yes” vote for the initiative.
Michelle Veale also will cast a “yes” vote, even though she is not opposed to tax-increment financing, nor impressed by the anti-tax campaign run by Ron Rankin of the property owners association.
“I see this as an opportunity to control growth,” Veale said. “I’m not sure it’s an entirely honest way to do it … but I think it’s all we can do.”
A vote on every tax-increment issue would place business recruiting in the hands of voters, something city officials and business leaders cannot abide.
Surely such votes, the city argues, would frighten away employers who otherwise would move to Post Falls. In fact, Micron officials have said they’ll consider public opinion - not just economics - in deciding where they’ll build a $1.3 billion manufacturing plant. Although considered a front-runner, Post Falls is among a dozen other sites in the running for Micron. The company appears to be watching the election, and a similar measure in Rathdrum, as a sign of Kootenai County’s interest in being home to a plant. Micron officials plan a visit to the county the day after the election.
Mayor Jim Hammond and others say tax-increment financing is a lowrisk gamble for major increases in property tax revenue.
“We have to trust the City Council to be able to deal with businesses that come along,” Hammond said. “If we have to go to a vote every time, we’re not going to be able to put deals together.”
The city put a deal together for Harpers Inc. a couple years ago, successfully courting hundreds of thousands of dollars in tax revenue. Hammond said more such companies are needed in Post Falls to lessen the percentage of city taxes paid by homeowners.
The property owners association - a group that forced Tuesday’s election with an initiative petition drive - contends that tax-increment financing is sure to raise property taxes. Besides, Rankin said, the initiative petition has nothing to do with Micron or Expo. “It’s about protecting the people’s right to vote.”
Public services may be left without adequate revenue while taxes from Micron or Expo are tied up paying off bonds.
While Hammond insisted that schools lose no money under taxincrement financing, they clearly miss out on the initial windfall from new businesses.
For example, a tax-increment area created for Harpers has paid $38,967 to the school district, or $4 for every $1,000 of Harpers’ assessed property value. Yet Post Falls’ school district levy is $6.81 per $1,000. If that levy increases when Post Falls voters approve a new school bond issue, Harpers’ tax-increment still would pay only $4 per $1,000 in assessed value.
The implication, however, is that schools do not get their full property tax entitlement from businesses lured by tax-increment financing until bonds are paid off. During that time, the schools must endure the added burden imposed by the new business, as do other taxing districts.
“Schools are a critical issue,” Rankin said. “That’s why we need to vote on each of these (tax-increment) things.”
But Post Falls school Superintendent Richard Harris said Harpers has brought as few as seven new children to the district, an impact so low as to diffuse Rankin’s argument. Schools are not suffering because of Harpers, but because of unchecked residential growth during the last four years.
Thousands of dollars spent by Post Falls and the business community to sway voters toward a “no” vote on Tuesday may be unnecessary, given apathy and confusion about the issue.
Some Post Falls residents asked about the ballot issue either don’t know about the election, or simply don’t care.
“Well, I really don’t have much knowledge of it,” said resident Dwayne Ley.
Said Linda Litalien, “What election?”
On Tuesday, registered Post Falls voters can vote at City Hall from 8 a.m. to 8 p.m. Absentee ballots are available. For more information, call 773-3511.
xxxx “Tax-increment financing.”