----- Original Message -----
From: "Alan Shilepsky" <[EMAIL PROTECTED]>
Subject: [Mpls] School Funding and Taxes
> Only trouble is, for the TIF properties the schools **weren't** getting
> the money--the City was. So the TIF property tax revenues will be
> reduced by the tax reform the City will receive will come up short and
> will have to search elsewhere to pay off its TIF bonds and meet other
> obligations (like NRP) that it supported with the TIF tax revenues.
>
This is correct with some refinement. School districts do not lose revenue
because of captured increment. The State makes the school district whole and
recovers its contribution by reducing the jurisdiction's Local Government
Aid.
The proposed elimination of the School Levy, however, will reduce the amount
of TIF revenue already programmed for community development activities. The
combined effect of the elimination of the school levy and compression of
class rates (at least as proposed in the House bill) will reduce the
expected amount of increment to Minneapolis by an estimated 30%, $20-$25
million annually. Using these estimates the City's debt service is fully
covered. The second half of NRP is only partially covered. (In point of
fact, TIF never did fully cover the second half of NRP. It had always been
anticipated that non-TIF development revenues would round out the annual $20
million NRP obligation.) Other ongoing development programs/funding support
by TIF or the aforementioned development revenues, e.g. commercial
corridors, contributions to affordable housing and infill housing, etc. are
more problematic.
Jack Kryst
Kingfield
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