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<br />district is made up through additional state aid. By contrast, <br />abatement payments are recovered by levying additional <br />property taxes spread across the entire school district. As a <br />result, abatements of school taxes will almost always cause <br />school district taxes to increase, while TIF has very little <br />impact on school district tax rates. <br /> <br />Benefits <br /> <br />Although abatement lacks the total economic capacity of TIF, it <br />offers some distinct advantages: <br /> <br />. Simplicity. The process for the approval and use of <br />abatement is far less complex than TIE <br /> <br />. <br /> <br />Collaboration. With separate approval authority, the use if <br />abatements encourages collaboration. It requires cities, <br />coumies and school districts to jointly consider implications <br />of the development project. <br /> <br />. Uses. Abatement fits with projects not well suited to TIE <br /> <br />Suggestions <br />The imerest in abatements is growing as more business owners <br />and developers become aware of abatements. What should you <br />do if you are approached with a request for an abatement? Here <br />are some basic suggestions: <br /> <br />. Develop a general business subsidy policy, eSlablishing <br />purposes for which your organization may and may not <br />consider <.:!rantin<.:! financial incentives to businesses <br /> <br />. Develop specific criteria and policies for approval of <br />abatemems. Remember, tax aOaEemem is a lunited resource. <br />It is important to consider if and how you will provide this <br />~"i<t~'lre nne< the :,mject meet ::I "but for" test? C:'1n the <br />abatement be targeted to achieve specific types of benefits to <br />the community? Should the use be designed to meet other <br />standards? Setting policies and criteria allows you to make <br />best use of this tool, avoid setting unwanted precedents for <br />future requests and provide consistent criteria against which <br />to evaluate requests. <br /> <br />. Fully analyze the impact of the proposed abatement on <br />property taxes. The impact on school property taxes is <br />especially complex. School abatements are likely to increase <br />taxes for other taxpayers. Your board or council should <br />receive complete information before taking an action which <br />will affect property taxes. <br /> <br />. Insist on a development agreement which clearly defines <br />the responsibilities of the property owners receiving <br />abatements. <br /> <br />. Hire your own legal counsel to draft and/or review <br />abatement agreements, development agreements and other <br />required legal documents. <br /> <br />. Require potential abatement recipients to pay for the costs <br />of your legal counsel, financial analysis and other expenses. <br />These expenses should not be absorbed within your \ <br />organization's general budget. <br /> <br />For assistance with any aspects of an abatement, contact Ehlers. <br /> <br /> <br />ivieet Rebecca Kudz <br /> <br />D ebecca Kurtz has joined Ehlers as an Associate Financial <br />~dvisor specializing in tax increment financing and <br />development projects. She brings a wide range of experience <br />with community and economic development projects in a <br />variety of different contexts. <br /> <br />Before joining Ehlers, Rebecca \\'orked on business <br />development projects at the Minnesota Department of Trade <br />and Economic Development (DTED). In this position she <br />assisted corn.111u!",jties \"ith tl:clY ..~e',-e1('lrrne'f!r efL~:r~ ~nd <br />worked with businesses that were expanding or relocating in <br />the state. <br /> <br />Prior to her position at DTED, Rebecca worked with rural <br />de\'elopment at the South D~lh,u Gl,\'ernor's Office of <br />Economic Development (GOED\. While at GOED she <br />assisted small businesses with del'eloping business plans, <br />identifying sources for fmancial aSSlScance, and creating <br />marketing opportunities. <br /> <br />Rebecca's educational background includes a Bachelor's of <br />Science from South Dakora SUHe University. She has been <br />certified as an Economic Development Finance Professional <br />hI' the N;Hi,'nal De\'clorment C,uncil. <br /> <br />Rebecca will serve on Ehlers' TIF Team. She learns the <br />secrets of "the TIF" from the TIF ~laster, Sid Inman. When <br />asked about the first advice he ga\"C his new apprentice <br />Inman replied, "Feel the TIE It is around you in all <br />development." Inman expressed some concern that as a <br />former State employee Rebecca may be susceptible to the <br />dark side of the TIE Rebecca dismisses such concerns and <br />says "It is a thrill to learn from a li\'ing legend!" <br /> <br />3 <br />