Rep. Dickey Lee Hullinghorst, (Boulder), plans to introduce a law to revise tax increment financing (TIF), which is often used to create or expand businesses, particularly in urban renewal districts. Hullinghorst wants to allow all the taxing jurisdictions, school districts for example, to become involve in the TIF decision-making process. She suspects some projects that involve tax-break financing hold economic benefits, but absent any reporting standard for the return on investment, she said she can’t be sure.
However, in spite of the way TIF is characterized by the media, it is hardly a “big break for big business.” Why? Simply put, a government approves the use of TIF to by developers in urban renewal areas because it creates new sales tax revenues and also pays for infrastructure the government couldn’t afford to build on its own. Proponents of urban renewal and TIF argue that Hullinghorst’s bill will hurt make TIF-funded developments difficult or impossible in the future. Certainly the bill would increase the amount of time needed to put together a TIF agreement and as we know, in the development business time is money.
Urban renewal districts all over our region have used urban renewal and TIF financing to make projects happen. Examples include Centerra, the LePrino cheese factory in Greeley and the Foothills Mall and Twin Peaks redevelopments. Speaking of malls, Hullinghorst believes using TIF for mall projects is questionable, saying only developers benefit. That seems like a very harsh and inaccurate assessment.
Hullinghorst’s bill has raised concern among a variety of different interests, including the Colorado Municipal League, a variety of economic development organizations and the Colorado Association of REALTORS. Why is CAR wary? Clearly economic development is an important quality of life issue, because economic development brings jobs and government revenues. People like to live in communities with thriving malls. They like towns with quality infrastructure with sidewalks, decent lighting and aesthetically pleasing public spaces.
Some TIF opponents, like Larimer County Commissioner Steve Johnson argue that TIF “takes money away from the people” without their say. Others, like Jay Hardy of McWhinney, note that without TIF, the new interchange at I-25 and Highway 34 would never have happened. TIF may allow developers to keep tax money but that money would never have been generated without TIF financing. It will be interesting to see if Hullinghorst can find enough support for her bill when the 2014 legislature convenes in January.