More and more and now more Tax Increment Financing
Posted by Becki Gray at 6:33 PM
Today the House debated Senate Bill 97, Critical Infrastructure Assessment Changes that greatly increases tax increment financing (TIFs). See more on TIFs from Daren here and Joe, here and here, from Agenda 2008 , and my previous post here. TIFs are the funding mechanism used by local governments with no voter approval and with the highest interest rates. The Randy Parton Theatre is an example of how TIFs work as Don discovered and explained here.
When a Constitutional amendment (Amendment One) was narrowly approved by voters in 2004 allowing TIFs to be used by local governments, just a few projects were allowed to be funded with this non-voter approved mechanism. The kinds of TIFs projects that could be funded included:
Then last year, the General Assembly increased what TIFs could be used for (per the NC Research Complex aka the fruit and nut center) to include
Auditoriums, coliseums, arenas, stadiums, civic centers, and convention centers
Art galleries, museums, and art centers
Redevelopment through the acquisition of land
Storm sewers and flood control facilities
Preservation of railroad corridors
Improving telephone systems
Streets and sidewalks
Now Senate Bill 97 extends TIFs to even more projects and again with no voter approval. Included in this bill:
Community college facilities
Improvements to subdivision and residential streets
Low and moderate-income housing
Park and recreational facilities including stadiums, arenas, golf courses, swimming pools, wading pools or marinas
Rep. Deborah Ross, D Wake amended the bill with language that clarifies public contracts cities or counties may enter into for construction projects and makes allowances for liens.
The second reading vote on Senate Bill 97 was 81-25.
Third reading and additional debate will be next week.
Perhaps someone could ring the warning bell that more TIF is not better TIF. Incurring more debt without taxpayer approval is never better.
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