09/11/85 - Laserfiche WebLink

Home

I I percent in 1987, a~c~rdirg to the Dep~rtment of Property Taxation, lamnapin Omnty. i ~venues of the .federal and state ~c~er~ents are oc~mtitted without · l~ecific ~natior~--~ [~r~l ar~ s~ate goverr~ents both forego revenue with ir~ustrial revenue bo~fls. The state g~vernment automatically increases its aid to school districts as a result of tax-increment financing. Such approaches might be justifiable, ]mat not wl th~ut limits. The purposes for %~hich the assistar~e is provided are too broad--Originally, public assistance for private real estate development I w~ ~si~ned e~lusive.l.y to help get rid of dilapidated ]maildin~s and encourage new oonstruct~on on the newly-vacant land. N~w, h~wever, assistar~e is possible without any d~mo~stration of blight. I ~ ~o~sibilities explored--Before settlirg on our a reocmemdation for redeve~_:nt fund coupled with restrictior~ and phase-out on tax-increment I I I I ! finar~irg, we explored several options: First, we looked at the co~equemces of le~virg the current system largely unchar~. Despite the problems outlined in our oomclusions this cption still might be oo~sidered be~a_,,se: (a) no really major scar~als have ~=en uncovered, and (b) public officia]~ are enccunterirg no great cry of public indignation. But we felt the probl~m~ identified demand action in any event. Seoo~d, we seriously oonsidered trm~sfor...{~3 the medmni~ of th~ tax-increment system from indirect levies and aids to direct levies ar~ aids. This possibility intrigued us because it would create more visibility without char~ir~ existirg autt~rity of city goverr~e_nts or the distribution of burdens and benefits. But such a charge in%~)l%~s direct levies on the assessed %%luation of scl~ol districts ar~ ccunties as well as direct aid from the state, whid~ would not be easily urflerstcod by sclz~l, county ~r state officials. Also ~ of us feared that t~ ~irect levies might make the tax-increment system so visible that r~ city official would dare use it. We preserve an element of this proposal, ~wever, in that property tax officials would be required to report the actual effect of tax-increment finamcing in these terms, even if the mecfuanics aren,t charged. Third, we o~nsidered only imposi~ restrictior~ on tl~ use of tax-increment finar~irg, s~_h as.- (a) limitirg the amm~ of assessed ~lue which may be captured, (b) requirir~ school districts ar~ counties to approve new districts ~r extssnsia~s of existirg o~es, (c) removirg the indirect state subsidy in the school aid formula, (d) limitirg the types of develq~nent for which tax-increment may be used, and (e) preventirg the accumulation of surpluses in tax-increment accounts. ~ of ~ restrictions seem reasoD~hle, ]mat we did mot believe it is desirable to impose restrictions without givir~3 city officials sc~e other ct~ice. Fourth, we midered immediate replacement of tax-increment financin~ with a city redevelopment fund that would be finar~ed by a direct property tax levy and b~ other sources. We like this a~pro~ch very much, but we are reluctant to r~ such a radical d%arge all at once, kncwirg that city officia]~ will want ~o see some experier~e with suc~ a ~ before beir~ confident that it is an acceptable alternative to tax-i~cr~,~nt financirg.