Mr. Barisonzi wrote a post about property taxes, NRP, the public schools, and the use of tax increment financing (which he calls corporate welfare). His post is shown below for reference
To clarify a couple of Mr. Barisonzi's comments. Tax increment financing are tax dollars. They are not, however, substitutable for tax dollars raised for schools, the City, or the County. You get TIF dollars by doing a project. You rebate a portion of the property taxes that would have been paid by that property (that's the TIF money) back to that property. You do this because without this aid, the project would not have occurred (this is known as the "but for" test) and that there is a public purpose for the expenditure (remove blight, build public infrastructure, clean up polluted land, etc). If the "but for" test is true, that the project wouldn't have occurred without TIF. This is why you can't take TIF money and use it to fund schools. No TIF project, no TIF dollars. The tax base is no better or no worse off because of doing the project. The tax base, over the short term, is no better or worse off for doing a TIF project. Now, over the long term (10-30 years), the TIF infrastructure will come back to the tax base and ultimately grow the tax base. In addition, the concept of TIF was that the judicious use of TIF money would spur additional development around it, thus also increasing the tax base. These two things do directly benefit the taxpayer by creating a larger tax base. Now there was a special exception to this. NRP was created when the City was able to refinance its TIF bonds at a lower interest rate. This is exactly like getting a lower interest rate on your mortgage. The idea was that you take this savings from this refinancing and give it back to homeowners, thus allowing them to participate in the growth of the commercial/industrial tax base. There were other options for using this money. It could have been given to the City, County, and Schools to reduce their taxes. It could have been used to buy down the bonds (like paying off your mortgage early). As Mr. Barisonzi notes, there were many programs that could have been funded with this. I think that because of this, because it was essentially "found" money, something that rarely happens in public finance, there will always be a debate as to whether this was the highest and best use of the funds. The idea at the time was that you get big government out of the way and let people make their own decisions about what is best for their neighborhoods. I think public policy people will be debating for a long time whether or not this experiment was successful. Carol Becker Longfellow >From: "Joe Barisonzi" > Michael, > > My first inclunation is to say that NRP and the School are funded through > different mechanism and different pots of money. But recongnizing that it > all eminiates from the same source -- taxes, I, perhaps foolishly, > considered your arguement that there is a choice between NRP and MPS. Why? > Why is the choice between NRP and MPS? Why is the choice not between > coorporate wellfare like the new Target building and MPS? Why is the choice > not between money for a new stadium and MPS? Why is the choice not between > affordable housing and MPS? Why is the choice not between road construction > and schools? Why is the choice not between $300 "rebate" checks and the > schools? > > Why is the choice in your mind between NRP and MPS? The MPS is one of the > partners of the NRP program, in fact it was NRP dollars allocated in > partnerships with neighborhoods and the MPS that helped to defray a > significant portion of the infastructure costs associated with moving to > community schools. Above and beyond that investment, many neighborhoods > invested significiant percentages of their non-school NRP money for > school-related infastrucutre. From computer centers, to enhanced gyms; from > curricullum programs, to a new school. > > One of the interesting things about NRP from a public policy analysis has > been that so many people have tried to set up funding dicotomies between > <fill in the blank desired program> and NRP. Another recent public example > of this is the false choice between affordable housing funding and NRP. _______________________________________ Minneapolis Issues Forum - A Civil City Civic Discussion - Mn E-Democracy Post messages to: [EMAIL PROTECTED] Subscribe, Unsubscribe, Digest option, and more: http://e-democracy.org/mpls
