How Urban Renewal Generates Income

Revenue for urban renewal is determined differently than taxing districts such as the county, city, or school district. The amount of income received by taxing districts is based on their budget, which is capped. (see Determining Property Taxes). Urban renewal is not a taxing district so it does not have the authority to create levy rates. This means the amount of income they can generate is not determined or capped by a budget. Instead urban renewal adopts the total levy rate (the sum of all the taxing district levies). Urban renewal's revenue is calculated by multiplying the adopted levy rate by the difference between the current net taxable value and the value of property the year it went into an urban renewal district.

The assessed value of the properties in an urban renewal district at the time the district is put in place is called the Base value. The taxing districts that serve properties in the urban renewal district can only levy property taxes on the base value during the life of the urban renewal district. See section 4 of Idaho Code 50-2903. The Increment value is the amount that the assessed value increases after the urban renewal district is put in place. Urban renewal receives property tax dollars calculated on the increment value.

The urban renewal district has the power to undertake and carry out any project or activity within its area of operation. The decision of what projects are taken on by urban renewal is not taken to a vote per Idaho Code 50-2007. A public hearing is held before an activity may begin per Idaho Code 50-2008.

Determining Base

If an urban renewal district began in 2002, the 2002 value becomes the base. This means there is no increment value the first year therefore the urban renewal does not have income that year. Every proceeding year for the life of the urban renewal district (typically 24 years) the base value is subtracted from the current year's value to calculate the increment. When the increment increases more income is generated for urban renewal projects. (Update 2011) A revenue allocation area formed after 2011 is limited to a 20 year life.

Notice of Public Hearings

Notice of these public hearings are published in the legal section of the newspaper.  Idaho Code 50-2905 (updated 2011) Nothing herein shall prevent the agency from retaining assets or revenues generated from such assets as long as the agency shall have resources other than revenue allocation funds to operate and manage such assets.

Determining Base and Increment table