Here's information that may help to sift through some of the various rumors.
TIF has not been eliminated.
The combined effect of property tax revision and the state takeover of
school funding has reduced the amount of TIF generated by current and future
TIF Districts in Minnesota. Initial estimates are that the expected TIF
revenues for Minneapolis will be $23 - $25 million less. There is work
currently underway to more precisely quantify the loss.
NRP has not been eliminated.
The MCDA has had an annual obligation to fund the NRP at $20 million dollars
a year through 2009 from Common Project (a combination of TIF districts)
revenues. One of the effects of the above-mentioned tax reduction is that
there will not be sufficient TIF to support that level of funding. How much
will be available is not yet known but is also being evaluated.
The MCDA has not been eliminated.
The statutory pecking order for the use of Common Project TIF revenue is
generally as follows: debt service, NRP funding, other eligible community
development. As noted above there will no longer be sufficient revenue to
support NRP. This means that all other TIF supported community development
activities have also lost their funding sources. This includes annual TIF
set asides for industrial land acquisition and cleanup, affordable housing
and commercial corridors. Program and activities supported by non-TIF
sources such as CDBG, HOME grants, MHFA etc are uneffected.
There is a problem with unused NRP Phase I balances.
Unexpended revenues from TIF districts created before 1979 may only be used
for debt service after April 1 of this year. Since the Common Project had
been the source of NRP funding and since the majority of TIF districts in
the Common Project were created before 1979 the majority of the funding for
the first half of NRP came from these pre-1979 districts.
A language change to allow these funds to be used for their intended NRP
purpose was requested. The Legislature consciously declined to adopt the
change. Initial estimates placed these balances at $58 million. Some
portion of the unused NRP balances come from other than the pre-1979
districts. These numbers are also being more clearly defined.
There is a great deal of effort underway involving City leadership and staff
at the NRP, MCDA and City to accurately quantify the effects of legislative
action (and inaction) and to identify viable proposals for maintaining the
needed level of community development (including NRP). The Mayor and Council
President have called for some immediate actions and deadlines which I
imagine should be released in a statement shortly.
More to follow.
Jack Kryst,
Kingfield but writing as
Manager, Project Planning & Finance
Minneapolis Community Development Agency
(612) 673-5130
-----Original Message-----
From: List Manager [mailto:[EMAIL PROTECTED]]
Sent: Friday, June 29, 2001 3:03 PM
To: Mpls list
Subject: RE: [Mpls] NRP funding
Forwarded from Heather Martens, a non-list member who is chair of King
Field's NRP Steering Committee. There's some pretty interesting speculation
here...including the demise of the MCDA??? This info has not been confirmed,
but is more than we have on the list so far...
-- David Brauer, list manager
Hello, everyone -
It appears that the legislature, in finally passing its tax bill, decided to
eliminate the revenue stream for NRP. That could sure change NRP Steering
Committee and KFNA Board life as we know it. Here's what I know (not much)
from Peg Mountin, our NRP staff person downtown.
The legislature eliminated Tax Increment Financing (TIF) districts, which
are a form of business tax. This was one of the business tax cuts. TIF was
the source of revenue for NRP. According to Peg, the 1500-page bill includes
a requirement that the MCDA give back any money that it has spent since
April 1, 2001. This amount is about $60 million. The MCDA itself may be
eliminated as a result of this, she thought. The significance for us may
very well be the end of all NRP activity. We are not sure about this, and
David Brauer, who also has been making calls about this, said the city might
figure out a way to get us the money from elsewhere. We'll know more next
week.
[Incidentally, the MCDA administers the federal money from Community
Development Block Grants that fund all of the city's neighborhood
associations. The federal money isn't at risk, but if the administrator in
our city disappears, that could make things a bit complicated for us as a
neighborhood association.]
Peg had heard that there is a petition drive beginning that would put on the
November ballot some way to reinstate NRP's revenue stream. A group is
looking into how to work this legally. The enabling legislation for NRP is
still in place, so if another revenue stream is set up, the program could
continue.
This is all I know right now.
Heather Martens
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_______________________________________
Minneapolis Issues Forum - Minnesota E-Democracy
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http://e-democracy.org/mpls
