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ExecutiveSummary:StudyoftheMetropolitanAreaFiscalDisparitiesProgram <br />FortheMinnesotaDepartmentofRevenue <br />Thatsaid,taxincrementfinancing(TIF)isusedthroughouttheregiontoencouragedevelopment <br />¦©š†;-·­“,š·wnonresidentialandresidentialdevelopmentwithmanyoftheprojectsappearingtobe <br />drivenbythe{¨ÒŒz·äofŒzE;|factorsidentifiedabove.Whileithasbeenmentionedthatmostsignificant <br />developmentprojectsintheTwinCitiesMetroregionincludeaTIFdistrict,theshareofTIFnettax <br />capacityoverthepast15yeshasremainedat4to7percentoftotaltaxcapacityintheregion.Whatis <br />ar <br />more,aState!Ò7z·š©x­reportonTIFdistricts(evaluating2009data)foundthatfrom20052009,the <br />numberofdistrictscertifieddecreasedby43percent.The!Ò7z·š©x­studyalsofoundthatin2009,34 <br />percentofthenumberofTIFdistrictswereintheMetroAreaand66percentwerelocatedinGreater <br />Minnesota,buttheamountoftaxincrementrevenuewaspredominantlygeneratedintheMetroAreaat <br />18 <br />83percent. <br />RegionalServices <br />Fromourdiscussionswithcommunities,anotherthemethatemergedisthenotionof{©;mzš“Œ <br />­;©Ýz-;­|thatmayormaynotbeuniversallythoughtofasservices.Examplesincludeprovisionof <br />housing(i.e.,servingasabedroomcommunityfornearbyemploymentcenters);protectionofwetlands; <br />andprovisionofinstitutional(taxexempt)propertiessuchasschoolsandhospitals.Therelationto <br />FiscalDisparitiesisthattheexistenceoftheprogramallowsthesecommunitiestoprovidethese <br />{­;©Ýz-;­|withoutplacinganundueburdenonitsresidentsoritslimitednonresidentialtaxbase.By <br />extension,anargumentisthattheexistenceofthese­;©Ýz-;­““7thevarietyoftypesofcommu <br />nities <br />inthe©;mzš““’‰;­theregioninwholemorecompetitive. <br />Relatedtotheideaofprovisionofregionalservicesisthenotionof{m;“;©·zš“Œ;¨Òz·äu|Growthhas <br />occurredintheMetroregionsincetheinceptionoftheFiscalDisparitiesprogramundertheassumption <br />thattheprogramwouldbeinplaceinthefuture.Thatis,perhapslocalitiesdidnotaggressivelypursue <br />commercial/industrialdevelopmentforavarietyofreasonsnottheleastofwhichwasthe{¦©š·;-·zš“| <br />oftheFiscalDisparitiesprogram. <br />ProgramExecution <br />Finally,acriticismoftheprogramisthemannerinwhichtheareawidetaxisconveyedtoa <br />commercial/industrialpropertyowneronhis/hertaxstatement.Acommercial/industrialtaxbilllists <br />{Cz­-Œ5z­¦©z·ä|undertheSpecialTaxingDistrictsheading,andtypicallycomprisesalargeportionof <br />theoveralltaxburden.Theargumentisthatbyvirtueofthewaythetaxislistedimpliesthatifthe <br />programwereeliminated,propertyownerswouldnotpaythattaxamount.Inreality,iftheprogramdid <br />notexist,taxeswouldbepaidtotheothertaxingjurisdictionsanddependingonstatusasarecipientor <br />contributor,theoverallamountoftaxespaidbytheindividualpropertyownerwouldlikelybeonly <br />marginallyloher. <br />werorhig <br />18 <br />OfficeoftheStateAuditor,{ãIncrementFinancingLegislativew;¦š©·r|January26,2011. <br />40 <br /> <br />