Tuesday, March 11, 2008

This is telling

Statesman Reporter John Miller reports that
Idaho developers are closer to being able to organize special tax districts to sell bonds to pay for roads, bridges and sewers, under legislation that narrowly cleared the House Revenue and Taxation Committee.
A lobbyist for developer M3
said the new bill gives developers another way to build major infrastructure in advance, with future buyers of properties paying for it.
This bill allows developers to shift the expense of certain items to future home owners, rather than paying the expense themselves. The City of Boise objected to it as contributing to sprawl.

Do I have this right? To a homeowner, paying off a bond is pretty much the same as paying taxes, isn't it? The House Revenue and Taxation Committee, those staunch opponents of giving Idaho cities the ability to impose local option taxes, are trying to give developers the ability to impose taxes. Developers, okay, cities, no way.

In the comments to the Statesman story, commenter jwinget says that these developer bonds can really stick it to a homeowner moving into the improvement district. If home sales stall and the bond bill kicks in, fewer homeowners than planned will be paying, so each owner's share is higher. This added cost discourages new people from moving into the development, so the few there tend to get stuck there. They can't sell their homes, and the bond payments stay high.

It appears that to the House Rev and Tax committee, this acceptable. Letting Boise and Nampa tax to fund a transportation fix, not acceptable.


Sisyphus said...

I linked you in on a post I did on this. The biggest issue for me is that government seems to be giving the developer quasi-governmental authority to tax, ameliorating any risk they have for any bad calls they make on the development. It transfers that risk directly to the taxpayer and gives them a pass for not reading the market correctly.

Alan said...

I agree that the concept does not jive well with free-market Adam-Smith invisible-hand types, which our legislators occasionally profess to be. The bill really does subsidize unrestrained growth, especailly for out of state developers who can swoop in and either make big $$ on a successful development or bail out on a loser. And yep, the homeowners (taxpayers) in the district are stuck with the bill.