CC PACKET 06041996 - Laserfiche WebLink

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rvi TAX INCREMENT FINA11 CL_ • • The State Auditor should work with cities and development authorities to ensure that all ta:increment financing users are aware of and comply with the reporting requirements contained in state law. The consolidation of the TIF reporting requirements under the State Auditor's Of- fice,which is also responsible for financial and compliance auditing,should result in higher quality financial data- Options ataOptions for Legislative Consideration We think that the continued use of tax increment revenues from pre-1990 districts to finance general public improvements and community projects is an issue requir- ing legislative attention. Under normal circumstances,cities would finance these projects with their own funds,special assessments,or other sources of funding, such as user fees. Although some types of public improvements may contribute to development activity,most improvements have little direct impact on tax base or employment growth. Tax increment financing is being used to provide a state and county subsidy for functions that most cities finance from other sources. Therefore,we recommend that: • The Legislature should consider placing additional restrictions on the use of tax increment revenues for general public improvements and j • community projects. Restrictions should apply to all districts certified f between August 1, 1979 and A; These districts account for the majority of 1995 captured tax capacity,and some of Restrictions on them could last for up to 19 more years. using TIF for Restrictions on using tax increment revenues to finance general public improve- general public ments could be structured in a number of ways. One option would be to prohibit improvements the use of tax increments from pre-1990 districts for specific purposes,such as could be park improvements and recreation facilities,community centers,civic centers,ice structured in arenas,wastewater treatment plants,water towers,freeway interchanges,or several bridges. different ways. A second option would be to rolubit aay future amendments to eosdw TIF lans that authorize increased tax increment spen g for general pub�roveme and community projects. If the Legislature pursues this alternative,it should con- sider making this change retroactive to,say,January 1, 1996,to prevent cities and development authorities from approving amendments before a future effective date. A third option would be to address those cases involving cities that have lmadi. adopted amendments to TIF plans for re-1990 districts. The Legislature could al- low the use of tax increments for new projects or w ch cities have issued bonds or entered into other legally biding commitmnents by a specified temspecified date,any projects remaining in the city's amended TIF budget- could not be financed with tax increments. This option co d be structured similar