The Idaho Supreme Court sided with the City of Boise in a case disputing the constitutionality of two urban renewal districts on Tuesday.
In January 2019, two leaders of the libertarian think-tank Idaho Freedom Foundation and four other plaintiffs filed suit against the city arguing the establishment of its latest urban renewal districts violated the state’s rules preventing local governments from incurring debt without the will of the voters. The case was thrown out for lack of standing in July 2019 and later appealed to the Gem State’s highest court.
Idaho Freedom Foundation Vice President Dustin Hurst declined to comment Tuesday. City of Boise spokesman Seth Ogilvie declined to comment.
Urban renewal = constitutional
The Idaho Supreme Court agreed with the district court’s ruling, which found Boise’s ordinances creating the two districts do not violate the Idaho Constitution.
Idaho Freedom Foundation President Wayne Hoffman, the organization’s Vice President Fred Birnbaum, and four other Ada County taxpayers concerned about the legality of urban renewal agencies filed the suit. Their attorney later filed an amended complaint including the Blue Valley Tenant Association and 10 other tenants of the Blue Valley mobile home park as plaintiffs, which falls in the newly created Gateway East urban renewal district, but these additional parties were thrown out by the judge in the 4th District when the case was dismissed.
In the complaint, the plaintiffs argued the cost of improvements planned in the districts will be higher than what the city could afford to pay if it stopped sending tax revenue to the urban renewal agency Capital City Development Corporation to cover the cost of bonds it issued. They argue this would burden taxpayers by potentially putting the city in debt without their approval.
Process protects against liability
The court’s opinion said this argument is flawed because the ordinance requires the city to keep using tax revenue to cover the payments on the bonds. And, because tax increment financing cannot legally create a liability for the city and, by extension, its taxpayers.
“Plaintiffs offer no support for their assertion that the provision of TIF revenues for the Shoreline and Gateway plans will “inevitably” impact the City budget and lead to higher taxes,” the opinion said. “Rather, the argument appears to be an invitation to speculate about the independent decision making of City leaders in setting future budgets.”
The opinion went on to describe how the City of Boise would not be liable because of how the urban renewal process works. The figures laid out in the feasibility studies for the district only lay out the cost of possible improvements, which would only be paid for if there are sufficient funds coming in from increases in tax revenue in the area. If there were no funds coming in, there would be no obligation to cover the cost of any improvements.