Business

Taxes To Increase Eagle Rd. Traffic

Meridian politicos are aiming to deprive the citizens of Idaho of at least $15 million in sales taxes to help a commercial developer create more traffic on Eagle Road at Fairview where he wants to build another retail mall.
Eagle%20Fairview.jpg

A new law passed by the Idaho legislature to subsidize a Cabela’s in North Idaho will be used if the Meridian growthophiles get their way. In a nutshell, the law allows developers to loan cash to the state to build highways that otherwise wouldn’t be built. They have to spend a minimum of $8 million and a maximum of $35 million for road improvements.

The developer fronts the money and the state pays back the cost to the developer in the form of rebates from sales tax revenues collected from stores in the mall. It is an accounting nightmare for the Idaho Tax Commission. Instead of just a single account for a retailer–regardless of how many outlets it has–the commission will have to break out each store in the developer’s mall and then send the developer a monthly rebate of 60% of the sales taxes collected, based on sales of outlets in that mall only.

Meridian Mayor Tammy de Weerd is glib when she explains how the law works, but is apparently eager to add to the 90,000 cars traversing Eagle Road daily. She told the Daily Paper, “It’s new money to the transportation system. It’s new money to the region and it’s not taking money away from other critically needed projects.”

She skirts the facts. The entire cost of the project is funded by Idaho Sales tax destined for the general fund. The ABSOLUTE TRUTH is the entire $15 million expansion cost will be paid by public sales tax money that will never reach the general fund to benefit the citizens of Idaho.

Comments & Discussion

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  1. So the legislature passes a means for growth to pay its way and the Guardian wants to bash people for actually using it. The enhancement of commerical opportunites, shopping, and retail is a better alternative than what we used to have. Which was nothing. The Tax Commission knows how to divide by two. The ability to get needed improvements that will benefit everyone sooner is good for all. There are many checks and balances built into the law. Stop being the myopic idiot.

  2. Meridianman you are obviously part of the greedy growthophile bunch. G-Man has it right on this one. The Statesman reporters can’t get the truth past their editors, but this law is a scam to get taxpayers to pay for a developer dream…just like that crooked deal to issue bonds so Avimor could build roads at taxpayer expense. THEY didn’t even want to make the initial payments!

    This STAR scam is full of holes. What happens if the thing goes bankrupt (Boise Pit), changes to commercial offices that don’t pay sales tax. Keep the public roads public! I support growthophobes!

  3. Colleen Fellows
    Oct 22, 2007, 10:52 am

    We talk about the need to enforce impact fees for development. This law in effect allows developers the ability to circumvent roadwork impact fees. One additional thing to add to the pot is the fact that since Eagle Rd. is not scheduled for expansion in the 25-year plan, even if the developer fronts the money for the roadwork, the tax payers will have to come up with the money for maintenance that is not budgeted for, hence stretching the existing maintenance budget even thinner.

  4. But Dave, it is going to be paid with sales tax from stores that would not have existed without the developer’s up-front road money. So I don’t see the loss to taxpayers.

    The interesting questions that are left:
    Is the developer paying enough?
    Is $15 million enough to widen the road?
    Are two extra lanes enough for the impact of the new stores?
    Why does it only require widening south towards the freeway?
    Why not also widen North, towards the shoppers?

  5. Meridianman come where’s the brains. It’s a typical scam. It costs us in the end.

    Wonder how much you will make off this. Maybe that’s where the thinking is. Naaaa no one taught you to use the tools that you’ve been given.

  6. 1. The sales tax pot is not open-ended. The sales tax collected at these stores will, to a large degree, come from purchases now being made elswhere. It’s not like we build stores and there is this unlimited pot of money that will go to any new venture that opens up.

    2. This seems to me to be another way of avoiding a decision on how things get funded. We borrow against future federal payments (GARVEE) and now against future sales tax payments. The problem is that the money from future sales tax will indeed short the general fund.

  7. meridianman
    Oct 22, 2007, 1:33 pm

    You myopic morons. What solutions do any of you have? The Legislature passed the law. It does not affect impact fees. It improves a road that everyone wants to be able to use. Meridian used to be a place where you couldn’t even buy a decent dinner. Growth has good sides and bad sides. Get your heads out of the sand. Growth in the entire valley is happening and will contnue to happen. Come up with realistic solutions rather than just bashing on everyone that tries to do something. Every farmer that sells their land for a profit must be the greedy ones? Grow up.

  8. This is tax is all about freedom folks. You complainers and grothophobes all just hate freedom and AMERICA.

    It’s like our patriotic war, fighting for democracy in Iraq and soon Iran. We sell treasury bonds to the Chinese to pay for the war and we get the freedom to go shopping for stuff made in China. China gets to sell weapons to anyone including our foes and they end up killing our soldiers fighting for democracy.

    Bottom line is we still get to shop when we want, where we want and a new paved road to get there not to mention all the democracy we’re spreadin creating opportunity for contractors and developers right here in Idaho. 75% of all the goods sold in those stores will be made in China.
    What do you think the red star between Wal and Mart stands for?

  9. meridianman (after insulting the the other commenters): “Meridian used to be a place where you couldn’t even buy a decent dinner.”

    Has that changed?

    (Yeah, I know – I don’t get out much. Especially to Meridian for dinner. The traffic scares me!)

    Well, maybe growth isn’t so bad after all, huh?
    (-;

  10. Eagle Road is a nightmare from hell already. As a rule I stay away from it. Between the lane changers and the cell phones talkers and the cars from Gem County that don’t have brake lights, it is way too much for my nervous system. Why the DOT still has 55 miles per hour signs up is beyond me. You speed up until the line of cars ahead of you hits the next red stop light and everyone jams on their brakes, and you pray the car behind you has brakes and the driver is paying attention.

    Who in government is in Cabela’s pocket, by the way? Seems like the one in Boise has gotten special treatment with regard to collecting sales tax. Oh, yeah, you can find what you want at the store and then order the item over the Internet at the store so sales tax won’t be collected. Someone tell me if this is incorrect.

  11. You know, I don’t have too much of a problem with this financing mechanism for roads, particularly if Meridian is going to allow the project to be built as a PUD and particularly if Meridian turns down the PUD which they’ll then allow it to be built piecemeal. Why? Because if most if not all of this project is built piecemeal, it just adds to the traffic without requiring the developer to actually pony up a major chunk of money to fix the road.

    Impact fees will probably not be required in any meaningful amount because I don’t believe the State collects impact fees. ACHD can’t assess impact fees on state roads of which Eagle Rd is one.

    I guess I don’t understand where the money is supposed to come from to fix a road like Eagle Rd which has been totally jammed up making it fairly impassable. Taxpayers pay for public roads in the end. This way, the developer ponies the money up front and I would assume builds the road as well using State standards. Then the developer is paid back over time. I don’t know if he is rebated 60% or 100% but either way the taxpayers get a road, built much more quickly than relying on the government, probably at a cheaper cost when it’s built and most assuredly at a way cheaper cost than if we had to have government save our pennies and do it way in the future when the prices are up, up, up.

    Eric, I think the problem with GARVEE is that the State is taking so very long to build projects and then undersizes them (like I-84) that the purchasing power is totally eroded before one mile is even built. And so what if the general fund doesn’t have this amazingly large (maybe, maybe not) amount of sales tax sucking into it. Government is not entitled to everyone’s money.

    Besides, and again, pay me now for the roads or pay me later for the roads. This proposed format seems way more cost effective to me unless Meridian stops all development on Eagle Rd. Like that’s gonna happen.

    EDITOR NOTE–The point of this exercise is the developer is calling the shots and ALL FUNDING will come from the state general fund (sales tax)! Would the legislature appropriate $15 million from the general fund so a new shopping center will have access lanes?…that is most assuredly the net affect of this deal.

  12. Actually Guardian editor noteman, while the developer may get reimbursed for the road (is it 60% or 100%) it IS a deal for the taxpayers. Since Eagle is a State Rd I don’t think developers contribute to any construction costs.

    If the developer is reimbursed 60% then he is contributing 40%. If he is reimbursed at 100% it is still cheaper for the taxpayers because we are reimbursing him in tomorrow’s dollars for today’s prices. AND, if he doesn’t fill the stores or the stores don’t sell a lot then those repayment dollars are way way in the future. With the increasing costs in road construction supplies, anything you can build today will be much cheaper than what can be built tomorrow.

    Meridian is NOT going to say no to everything on Eagle Rd. It would be better to extract a major roadbuilding endeavor out of one developer today, than nothing from developerS tomorrow. And government has already said they have no plans for 25 years to do anything. Perhaps they’re waiting for us all to have bionic limbs so we don’t need cars.

    Don’t get me wrong. I despise what’s happening on Eagle Rd to every available square foot of empty property. I just think we have to be realistic.

    EDITOR NOTE–Developer gets 100% rebate. It is paid based on 60% of the monthly income tax revenue until all 100% is paid. Can’t argue your premise that it is cheaper now than in the future. Growthophobes oppose letting the developer drive the process. Developer creates the “need” and forces the state to buy him roads.

    Same deal with Harris Ranch, but instead of taking sales tax, they take “impact fees” which come from NEW CONSTRUCTION. If city doesn’t approve more houses, no payback funds for the bridge!

  13. Yes Dave it is kind of the same deal with Harris Ranch however, that one was approved before it was unapproved. That is, ACHD agreed to the deal which would have required that Harris Ranch be reimbursed for about a $6 million bridge. But ACHD never memorialized the agreement. Why? I don’t know but I think it had a little something to do with their incredibly incompetent attorney at the time among other things.

    Now that bridge is going to cost at least 3 times more before completion. And it will come out of property taxes that all of us pay rather than the impact fees that those homes would pay.

    Sorry, but I don’t think that’s a win for the taxpayer.

  14. Grumpy ole guy
    Oct 22, 2007, 8:39 pm

    I read the article in the Statesman and to me the reddest flag was that while the new regional shopping center is to be built on two sides (east and west) of Eagle Road at Fairview, there is NO indication that any “traffic easement measures” would be made on Fairview. If the need is present on Eagle, certainly the need is also needed on the always crowded / congested Fairview. It seems to me like another grab what you can for the moment and devil take the hindermost ploy on the part of the so-called planners / politicos.

    Another destination shopping facility on two sides of an over-crowded intersection does NOT make any sense.

    Doesn’t matter how the funding for traffic easement is obtained, it is an environmental threat and a planners night-mare.

  15. Curious Bob
    Oct 22, 2007, 9:08 pm

    I think we’re all a little confused. Perhaps editor noteman could clarify a few things?

    Does the issue here involve the fact that normally state road improvements are drawn from the gas tax fund (is this correct?) and not the regular sales tax on retail items, thus the developers control on how the legislature is able spend the money that would normally be in the general fund?

    Can this law be invoked whenever the developer wants to as long as the proper conditions for the magnitude of the expense (between 8 and 35 million) are met?

    And finally, so impact fees don’t play into this?
    Does that mean that before this law, ITD had to pay for all of the road improvements when something was being developed?

    Hope somebody doesn’t mind checking up on these things. Sorry I didn’t do it myself.

    EDITOR NOTE–Bob,
    You are correct in your conclusion the developer is attempting to create his own “improvement district” using sales tax revenues.

    The Tax Commission is in the process of writing a directive based on the law. The problem is the law is totally ambiguous and they don’t know how to enforce or make the tax rules to carry out the intent of the law.

    When drafted, it was done for Cabelas at Post Falls. The law refers to “interchange construction,” but then goes on to talk about other improvements.

    Sales tax goes to the general fund (generally speaking) thus about 11.5% is split among all the cities and counties in the state–political subdivisions. About 83% goes to the state general fund.

  16. Is there interest charged to the state? Or does the developer have to worry about getting paid by the sales taxes ONLY on the property they develop?

    I ask because if they are guaranteed payment over a certain time period with interest, then it appears there is relatively little risk. Just curious.

  17. Colleen Fellows
    Oct 23, 2007, 12:49 am

    Once again, where do we find the maintenance $ for the new lanes, that is a lot of extra pot holes we have to budget for in the next 25 years. What’s to stop the next developer from deciding the following month that we are going to indirectly pay for his decision to front money to widen a different stretch of Eagle Rd? Potentially, a large portion of hte sales tax dollars could be drawn away to pay for these improvments. As Eric said, there’s only so much purchasing power in teh valley, and if more shop at this particular development, less will go into the general fund.

    This topic of Eagle Road traffic reminds me of why I shop online at Christmas. And Treva, there is a line on the State sales tax form for you to fill in the amount of sales tax you owe for online purchases. When speaking to the State budget guys, I was told I am one of only a handful of Idahoans that actually fills that box in on my returns.

  18. sam the sham
    Oct 23, 2007, 6:51 am

    Tradition
    It’s tradition to give business whatever they want “for the good of the people”. Remember when the land and taxes were given to Micron in trade for jobs…and now Micron is leaving without so much as a “sorry for the lies, but money for us is money not for your locals”? My question is who IS getting the cash under the table? Vote those people OUT.

  19. Shame on Mayor Tammy and her developer pals. I read the editorial in the Statesman this morning and it just got me furious! The Guardian explained the details, but left out the part about sales tax going to the schools. We all have to do something to stop these greedy people. I am now a growthophobe for sure.

    http://www.idahostatesman.com/editorial/story/190745.html

  20. Lawrence Gardner
    Oct 23, 2007, 9:07 am

    Sidling Up to the Public Trough

    I find it interesting that David R. Frazier is squealing like a stuck hog about the proposed method of funding for a planned widening of Eagle Road to accommodate a new retail development – Meridian Town Center – and the possible loss of “sales tax” revenues that won’t exist unless the Center becomes reality.

    My mentor in the newspaper business, Pete Hackworth, who was editor of The News-Tribune in Caldwell when I went to work there after graduating from the College of Idaho , offered the sage advice that vociferous editorial reaction always depended on “whose ox was being gored.”

    Well, David, you are squealing as though it was your ox, my friend, but perhaps it’s just your imagination. You have nothing to squeal about since there would be no sales tax revenue to pay back to the developer of Meridian Town Center, a 258-acre development with more than 2.5 million square feet of retail, office and residential space, plus a 60-acre park, at the northwest and northeast corners of Eagle Road and Fairview Avenue, whew, without CenterCal Properties’ project coming to fruition in the first place.

    There would be no sales tax revenue refund for the general fund, or the loss thereof without the development!

    Methinks thou dost protest overmuch, Mr. “Frazier-Bieter.” Thou soundest a lot like Big Town Mayor Bieter who recently complained about ACHD impact fees being spent anywhere else but Boise.

    David, David, David … should CenterCal Properties spend $15 million of their own money to widen Eagle Road, enabling the construction of the Town Center to take place, so the businesses to be located therein (not yet built, remember) can generate sales tax revenue so a percentage can be paid back to the developer and a percentage to the general fund, money that would never be generated unless the stores are built.

    Just as Meridian Mayor Tammy de Weerd said, “It (money generated by the development) is new money to the transportation system, it is new money to the region, and it is not taking away from other critically needed projects.”

    Allowing the developer to pay for the road-widening which allows the unique Center to take shape does not increase the estimated $200 million highway funding shortfall as identified by Boise Rep. David Langhorst and his four similar-thinking Ada County legislative colleagues. In fact it, a considerably larger share of sales tax revenue might even help reduce the shortfall once the initial Eagle Road widening funds are reimbursed by sales tax revenue.

    You do have a gift with a camera, David, and I will concede you took an eye-catching photo of the congestion on Eagle Road, a shot reflecting a line of traffic in the side mirror of your vehicle, but there is another old saying … and it goes something like this … “Don’t bullshit a bullshitter .”

    So David, nice photo, but why don’t you fess up and just tell us … just where, in what sensitive spot was your ox gored anyway? Where does sale tax revenue that wouldn’t be there without Meridian Town Center fit into your Boise bleeding-ox scenario?

    Are you sorry you still have to live in Boise, when all the action is charging to the West? Is the Boise mayoral race just getting too boring for you lately?

    Come west young (or should I say old) man … . I will buy you lunch in one of Meridian’s hip new restaurants (more to come), say one like “Rick’s Press Room” that should please the pallets of two “old” newspapermen like us.
    — Larry Gardner

    EDITOR NOTE–You make the point for growothophobes on this issue when you mention, “office, park, and residential” areas. NONE of those pay sales tax. Another commenter made the point that disposable income is a finite amount. Rather than “new money” being spent (and taxed), a good portion is merely shifted from another retailer.

    Your conclusion of my ox being gored is simply wrong. I happen to CARE, but have no financial or political interest…or any other personal involvement.

  21. Colleen: There are probably not very many people who keep records of where they purchased things such as books, or sweaters, or analyze at the end of the year if sales tax is due the state of Idaho. Good for you for being so thorough and honest.

  22. Meridianman, Lawrence, et al., I agree completely with you. Pay no heed to Mr. Colic and his ilk as they oppose everything.

    Everybody screams that growth should pay for the roads. OK, here’s a plan but everyone freaks out about it.

    However, Colleen raises a good point and I don’t think developers should use STAR to get out of impact fees. Impact fees are intended to make growth pay its own way. If there are any additional needs beyond that, then this option should be on the table, as sales taxes help pay for roads anyway. As for the “nightmare” for the State Tax Commission, I have two words: accounting software.

  23. Wonk–
    Why don’t you tell your “ilk” that you have been turning tricks for years on behalf of government and fat cat developers. All the neighbors and postal people know who you are. You didn’t get those PR jobs because you were a hard hitting impartial journalist. Even when you worked at the Statesman your slant was for growth.

  24. I have a solution. They should build a big traffic circle on Eagle Road. Then no one would have to stop. Everyone would be happy. They could build a big fountain in the middle so people could throw spare change in it for good luck. Eventually it would pay for the road.

    FYI….Dog is considering running for mayor. Vote Dog, I promise to do my duty.

  25. “Another commenter made the point that disposable income is a finite amount. Rather than “new money” being spent (and taxed), a good portion is merely shifted from another retailer.”

    So, there may be a slight chance that I am not a myopic moron? Maybe just a regular moron?

  26. Mr. Colic, how nice of you to take time out of your busy schedule running a business, volunteering at a local school, volunteering for your neighborhood association and sitting on a non-profit board. Oh, wait, you don’t do any of those things – that’s just “butt-kissing” and “turning tricks.” The thought of getting involved in this community clearly repulses you.

    What, in fact, do you do for a living??? Other than bless us with your griping, that is. My guess is you’re a retired postal worker who moved from California a few years back. You’re interested in keeping this place economically stunted and keeping any newcomers out.

  27. Having the developers pay for the road is good.
    Paying them back is bad.

    If they want the new development so badly, they should just pay for the road and consider it part of their investment in those stores etc.

    By the way, are all the stores already out there making so much money that we just need to have some new businesses to take it away from them?

    Still, widening Eagle Road is good. It’s already a lot of fun to turn right onto E.R. from another street and then try to force your way toward the left so you can turn left later to get where you need to go.
    Working your way across even more lanes would be even more fun — and should create even more work for the tow truck drivers, police, ambulance crews, hospitals, maybe even the mortuaries — see, it’s good for business, more jobs, more pay, etc.
    Should make evrybody happy.

  28. There are really more stores than people can use now in the Treasure Valley — at least there are many empty retail/commercial spaces that indicate there is a surplus of retail establishments.

    What I am seeing are developers tearing up ground because they have the financing to accomplish that and need to use it within a specific timeframe. But it does not at all seem certain they will actually build structures on that newly chewed up land or if they do, that they will find tenants. There seems to be an enormous amount of willful activity — a destructive kind of bravado saying: See the economy is fine, jump right in — I have credit so can you.

    What this valley needs is to take a deep breath; count to 10; look around and see what is needed, and then proceed with caution.

    I agree with those who say a major regional shopping facility on that corner would simply draw from others, already collecting sales taxes that go directly to the state without being drained off for a development scam.

  29. You can argue the pros and cons of this all you want. Both arguments have valid points, and both have weaknesses based on bad assumptions and partial truths used by everyone, from the Legislature on down to Dave.

    One indisputable fact is that Idaho is Republican Central and our ‘leaders’ will continue to give as many breaks as possible to Big Business. That’s what we get in a country whose motto should be “Never Let Common Sense Stand In The Way Of Making A Buck”.

    The sad part of this story is that ANYONE is willing to spend $15M to buy another dead horse because beating the ones we already have isn’t working.

    Einstein defined insanity as continuing to do the same thing over and over and over and over again, and somehow expecting to get a different result. Look at the history of Eagle Road over the last ten years and make your own diagnosis of our culture.

    Besides, “Q: How many lanes does Eagle Road need to handle all the drivers from California? A: Nobody knows, because as long as there’s one Idaho driver on Eagle Road, traffic will be screwed up.”

  30. Wow….it sure seems to me that much of this conversation would be irrelevant, and this type of law largely unnecessary, if the guys and gals in the statehouse simply did a better job of keeping up with our infrastructure needs. Unfortunately most of them seem to be following the example of many of those that post here. They whine and complain, and then do little else.

  31. curious george
    Oct 27, 2007, 1:58 pm

    To be accurate the need for Eagle Road improvements were recognized in the long range regional transportation plan, but because the federal government changed the rules and forbid any projects that had no probable funding to be included in the projects list (requiring them to be fiscally constrained – not a bad idea) the needed road improvements could not be included.

    The proposed STAR-eligible development just provides a light at the end of the tunnel – allowing planners to finally add the needed roadway improvments to the list. A lot of attention has been given to the extra lanes, but the real system benefit to the through traffic (those not going to, or comming from, the development) will be the inclusion of access control measures (raised medians, and better signal coordination). These will lessen turning movements and decrease congestion in the corridor.

    In reality the developer should not be reimbursed for any roadway capacity that benefits his development solely – this is his to bear to make his investment profitable (not the publics). But, roadway improvements come in big chunks (whole lanes, whole intersections). Perhaps the development will actually only require a fraction of the proposed improvements – but you can’t build a fraction of a lane. The developer should be reimbursed for the portion of the roadway improvements that benefit the general public, but for which his development will receive only small (if any) benefit. Call it his non-prorated share.

    If anything should be highlighted by this discussion it is the inequity of the gas tax distribution. District 3 (the Treasure Valley plus a little more) generates well over 40% of all gas tax revenue for the state – a lot of people, buying a lot of gas, putting a lot of cars and wear & tear on the District 3 roads. But, District 3 gets less than 20% of the gas tax revenue to build and maintain its roads.

    The valley is a big economic engine for the entire state, and we buy a lot of the product from the communities in the other districts. Unfortunately, our state highways the district suffer for the urban/rural divide in the legislature.

    There’s nothing inherently wrong with a state sales tax reapportionment – if done fairly. If anything it may help strike a balance in the gas tax distribution problem. The real difficulty is the lack of “sideboards” in the legislation (the Guv’s term, not mine). There’s no language in the statute that would put the breaks on an overly large reapportionment that could hurt the rural areas.

    Please note that ITD does note have the legal authority to charge Impact Fees (yet) – and Eagle Road is actually State Highway 55. And there’s a general misconception about Impact Fees – they can’t be used to improve roadway conditions. That’s right, if the system sucks when you begin collecting such fees, the money can only be used to make sure that the system won’t suck more. And, not a penny of Impact Fees can be used for the operation or maintenance of roadways. Right now, well over 75% of ITD’s budget is spent on O&M – and that figure is climbing every day as salaries increase (to keep up with cost of living), employer healthcare costs increase, fuel costs increase (with no increase in the per gallon gas tax), and every construction material known to man is increasing in cost.

    The STAR program is only one “tool” to address a fiscal crisis (and a short term one at that) – but it can’t be the only one. The folks who reside in Boise’s other big hole have to roll up their sleeves and look at the big picture. What we need is a Copernican Revolution in the way we fund infrastructure in this state.

    Though not a Republican, I am fond of Lincoln’s 1854 notion on governance,

    “The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves – in their separate, and individual capacities.”

  32. Just remember, no matter how much a developer or government official says something is going to cost initially, it ends up being much more after it’s approved.

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