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I i I I I I I I I I I I ! I I I Fifth, our preferred cption, we selected parts of g~ti~ three arfl four. During the last 10 years of increasingly heavy use, tax-increment financin~ has e~bled city governments to ur~ertake major develol~nt projects. For such a relatively short time we believe tax-increment financirg, with its ability to ocmm~ndeer, ir~irectly, resources of overlapping units of gove~,~,ent, including the state, can be justified. Mir~eapolis and Saint Paul, p~rticularly, urgently needed a spark in the early to mid-1970s, to make their dcwntowns strong metropolitan centers. Few pers~Ts wGuld challerge the assertion that both do~n~ are beooming showplaoes for the metropolitan area. Private investment in the last 10 years in the downtcwns has been aeeompanied by a significant dose of public assistance, much of it in the form of tax-increment financing. %9~ile the ir~irect syst~ may have been appropriate in the short term, it is r~t appropriate f~r the long term. The state shculd move to a direct system. A sixth option--really different frc~ all other options discussed m--would vest decision-making on de~_lq~ment assistance at a higher level of gove~-~ent, not th~ city level. ~e c~x~idered this approach briefly but oo~l~ that city officials probably are in the best position to determine r~-----~ds within their own _cc~m~nities. One attractive argument in favor of decision-making at a higher level is a reduced risk that decision-makers c~uld be influenoed by special favors fro~ developers seeking assistance. A seventh option wculd be to disoontinue all forms of gove~.,,ental financial assistance to private real estate devel~. A few _ _m~ers of our believe gover~nt should cor~entrate on delivery cf public services, leaving development to the private marketplace. A majority believes, however, that deterioratic~ an~ obsolescence, oc_~_l~etitive disadvantages, ar~ ur~esirable land use will not be ended fast enoagh withcut public assistar~e. An eighth option--discussed very slightly--is somewhat of a modification of the seventh. Urger this option the property tax system wculd be char~3ed so that a mud~ higher proportion of th~ tax fa/Is on the 1~ ar~ a mu~h smaller proportion, on the builldings. Supporters of this option conter~ that c~T~rs could not affc~d to keep deteroriated or obsolescent buildings on highly valued land, and, therefore, would redevelop the property c~ their own, without the need for public subsidy. M~st of us felt this idea holds suc~ slight prcmise of being implemented in the next few years that othar, more immediate, steps need to be taken. Also the idea is not easily grasped and ~ much more discussio~ before it ~ld be tried. Reportirg the effect of tax-increment financir~ in direct levy and aid terms Or~ of the most helpful exercises in our deliberations was to express tax-increment financirg in direct levy terms. Based c~ this experience we concluded that tax offici~l~ should be instructed to report tt~ effect of tax-incr__~nt finar~irg in these terms, even tlx)ugh the mechanics of tax increment 'would not be d~arged. Urger tax-increment financing, the new growth is held out of the tax base, with the total mill rate applied to the growth to generate rte tax-increment revenue. ~his makes the assessed valuation of the city, school district, ar~ ~ounty less than it would be if the growhh were part of t~ tax bese. G~nsequently, the mill rates are higher than ~ney w~uld be, assuming government