2001_0108_packet - Laserfiche WebLink

Home

Therefore, the MLC opposes any additional restrictions on the use of TIF by local units of government. Because TIF is an important economic development tool, attention must be paid to the negative effects that continued commercial-industrial property tax rate compression is having on tax increment financing (TIF) districts. The MLC believes that the Legislature should provide local units of government with the flexibility to cover any shortfalls compression may create. One way to address this issue would be to pass legislation requiring developers and owners of commercial-industrial property located in TIF districts to pay the statutory C-I rate in place at the time the development agreement was signed for the total length of the bonds. In lieu of legislation, the Legislature should appropriate assistance to cities in an amount sufficient to cover shortfalls created by commercial-industrial class rate compression. The MLC recognizes that an adequate supply of affordable housing is an important part of metro area revitalization and, therefore, an important component in encouraging economic development. The MLC strongly believes that in order to reach and maintain an adequate supply of affordable housing in the metropolitan area, existing affordable housing stock must be preserved. One tool to encourage the development of new housing and the maintenance of existing affordable housing could be the expansion of TIF uses, without penalty, for these purposes. Current law permits the use of TIF only for the development of rental housing. This law should be amended to allow the use of TIF for owner-occupied housing in addition to rental property. The MLC also believes that the definition of housing should be broadened to permit cities to use TIF to meet their livable communities goals. Finally, the MLC would support legislation that requires the State Auditor, when auditing cities for compliance with tax increment finance laws and rules, to apply the generally accepted accounting standards from the time period of the district. The MLC will support legislation that imposes a statute of limitations on the length of time the State Auditor may inspect financial records relating to TIF. The MLC will work closely with the State Auditor's Office and the Attorney General in an attempt to develop consistent and reasonable policies. Legislation may be necessary to codify these policies. D) OPPOSE RE-IMPOSITION OF LEVY LIMITS AND ANY FORM OF PROPERTY TAX FREEZE The MLC opposed legislation passed by the 1997 Legislature that imposed a two-year levy limit on local units of government. The Legislature continued this unwise policy during the 1999 session by extending levy limits one year — through the year 2000. We applaud the restraint of the 2000 Legislature in allowing levy limits to sunset for the following reasons: • Local spending decisions are best made by locally elected officials who have a clear understanding of the needs and desires of their constituents. Local governments have been making responsible spending decisions for years without imposition of levy limits by the Legislature. In fact, because locally elected ofFcials are responsive