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Idaho Supreme Court Upholds Constitutionality of GBAD Convention Facility Financing Scheme

by

HARRISON BERRY
  • Harrison Berry


The Idaho Supreme Court handed down a decision today upholding the Greater Boise Auditorium District's financing scheme for a piece of the Boise Centre renovation that would include a new ballroom/banquet facility.

At issue was whether GBAD's financing arrangement violated the Idaho State Constitution, which restricts taxing entities from going into debt.

According to respondent David Frazier, editor of the Boise Guardian website and a longtime public debt critic, GBAD's agreement with the Capital City Development Corporation to finance the new Boise Centre facility exposed the district, which is funded through taxes on hotel rooms, to financial liabilities greater than it could pay in a fiscal year.

Article VIII, Subsection 3 of the Idaho Constitution reads, "no county, city, board of education, or school district, or other subdivisions of the state, shall incur any indebtedness ... without the assent of two-thirds of the qualified electors."

Frazier, whose lawsuit against the city of Boise in 2005 prompted the law limiting public indebtedness, sued GBAD in 2014 over the financing plan. Idaho 4th District Judge Melissa Moody agreed with Frazier and rapped GBAD's knuckles, describing the arrangement with CCDC as "subterfuge for what is actually a conditional sales contract."

Moody again took aim at GBAD's financing in March 2015. The issue bounced between judges for a year before the state Supreme Court heard the case, eventually ruling in favor of GBAD. In a summary of its decision, the court wrote, "the agreements into which [GBAD] entered satisfied Article VIII, Section 3 of the Constitution. 

"My big fear is that the right of citizens to weigh in on public debt will forever be compromised by this ruling, opening the door to local governments to never seek voter approval for bonds, opting instead for 'annual leases,'" Frazier wrote in Boise Guardian