Tax-Increment Plan Comes Under Fire Rankin Launches Petition Drive

Tax activist Ron Rankin says he wants an 11th commandment added to the biblical tablets outside city hall: “Thou shalt not rip off taxpayers to provide corporate welfare for developers.”

That’s how he describes tax-increment financing, a method of helping developers pay for large projects such as International Expo, a retail project proposed on 600 acres west of town.

Expo fans say Rankin’s portrayal is unfair. Taxpayers are not put at risk, they say.

On Tuesday the Kootenai County Property Owners Association, led by Rankin, formally kicked off a petition drive in opposition to tax-increment financing. Rankin, who does not live in Post Falls, wants a local vote every time a project is considered for tax-increment financing.

If that’s all Rankin wants, Post Falls City Councilman Joe Doellefeld said even he would consider signing Rankin’s petition.

“I think anytime citizens have a chance to voice an opinion, it’s fantastic,” he said.

Other Post Falls officials warn that Rankin’s drive is premature. A study of whether Post Falls qualifies to offer the financing probably won’t be complete until late September. A new state law allows “disadvantaged border communities” to use the taxing method.

The city has not even passed a local ordinance allowing the method, said city administrator John Hendrickson. Debate on that issue probably wouldn’t occur before October.

Rankin’s proposal also includes a 120-day moratorium to prevent Post Falls from moving ahead with tax-increment methods before his supporters can stop it.

Tax-increment financing allows cities to guarantee bonds sold to finance a development. The bonds are repaid with property taxes generated by the improvements. Existing tax revenues are not used.

Rankin argues that cities lose tax money that would otherwise pay for services to support the development - like police and fire protection. That money, therefore, must come from other taxes.

Also, if the developer defaults, the city’s bond credit rating would go down the tubes, Rankin says. That hurts everyone.

Hendrickson disagrees. The cost of infrastructure improvements for a large-scale project like Expo would be covered in the bond sales and paid for with the new tax revenues.

Rankin hopes in the next two months to gather 940 signatures from Post Falls residents, enough to put his initiative on the ballot in November.

Hendrickson questioned whether his proposal was legal. Post Falls City Attorney Jerry Mason declined comment, and efforts on Tuesday to reach the deputy Idaho attorney general who could make that determination were unsuccessful.