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I i I Transfers should be allowed from ~he redevelopment fund to the 9metal M if a city oour~il ~nts to ~turn to the ~_neral fur~ any amounts transferred to the redevel~ fur~ earlier. Direct property tax levy--~he Legislature should allow city goverr~ents to levy property taxes directly for redevelop,~_nt ~, without being ~ubJect to levy limits (x %Dter referer~lum. Limited '~surplus'; revenues from tax-increment districts--We recommm~ that a city .government should be allowed to trar~fer to a redevel~t ~ from a tax-i~crement district tl~ equivalent of %p to three years'. tax increment revenues, after er~uc~ my is accumulated in tax-i~nt re~_nues to finanoe the rede~alolm~nt expenditures in the affected tax-ir~rement district. This is the o~e exoeption to our proposal, outlir~d below, that would prohibit tax-increment districts from accumulatin] _mor__e ~ than are necessary to p~y off c~-.'.,~tments made when the districts were establis]~.=d. I I UE~S repayments--Repayments to city governments of Urban Develcpment Action Grant (UI~G) loans. Urger existing federal law a developer is required to repay a ~ to the city, but the city then can use the ~ __{39r_ other devel~-related purposes. It does not have to return the mc~ey to the federal government. Other repayments--Repayments to city governments of l_r~ns and other m types of reooup~ent which might be nsgotiate~, with developers, such as, for ex~mp1 e, a repayment to th~ city of subsxdies at th~ time t]~ property is sold to a different party. I State aid--We reo~m~e~ a special state aid program for cities'. redevehOfm~ent ~. State dollars would be apporti~ according to a formula weiglT~d f(x x~de~lop~ent. For example, the a~cunt a city I government reoeives could be related to the age or physical cu~dition of its ~uildir~s. i I General obligation bo~dirg~ recc~m~J~ that state /aw provide explicitly that a city can issue general obligation bo~ds and plaoe the should be permitted only if they are issued in a met i~ich c~nra.t~ees that they cour~ as ~ Of the net bor~ed debt Of the city. 4. Tighten use Of ar~ ultimately discontinue tax-increment financin~--0ur prol~als are designed to ~e city governments to use redevelopment funds instead of tax-in~m~_ -r~ financing. We propose that tax-increment financin9 be allowed to continue f~r several years, l~mited to physical renewal of property. During that t~_~ cities should be allowed to use both redeveloimmnt fur~ls ar~ tax-increment (with the restrictions we outline below). We r~nd that the Legislature set a date after which no additioz~l tax-increment districts may be created ar~ no additional improvem~ts financed with tax-increment dollars may be un~eztake~ in previously-existing districts. A reasonable date would be 2 1/2 years from the date of passage of a statute embodying our proloc~als. If these ~r~atior~ are adopted by the Legislature by mid-1986, cities would be able to make additio~al _cc~; tments usi~ tax-inc _re~e__nt financing until January 1989. Of course, t~e allowable period under state ]aw for co~i~ tax-increment revenues may be as lc~g as 25 ~sars. (kmsegue~_ly, tax-increment wo,~d not disappear totally until up to ~5 years after the app~ of the last ta~-increment project.