(April 15) – The House Finance Committee gave its approval this afternoon to Speaker Dickey Lee Hullinghorst’s bill to level the playing field between cities and counties when it comes to financing for urban renewal redevelopment projects.
Cities can, and often do, sweep county, school district and special district property taxes for municipal redevelopment projects, using what’s known as tax increment financing.
TIF works like this: a city or its urban renewal authority issue bonds to redevelop a blighted area with the pledge that all or some of the property taxes paid by the owners of the enhanced properties in the once-blighted area will go to pay off the bonds.
Problem is, those property taxes are used by school districts, county governments and special districts like fire districts or library districts. The cities are paying their TIF obligations by reaching into someone else’s pocket.
“The major goal of this legislation is to make tax increment financing for urban renewal transparent, accountable and give all of our local taxing entities the power to stand up for their taxpayers and to make sure that these projects work,” Speaker Hullinghorst told the committee before its 8-3 vote.
HB15-1348 would level the playing field by requiring cities to invest a dollar of their own revenue, which mostly comes from sales taxes, for every dollar taken from another government or district’s tax base.
The bill requires urban renewal boards to include representatives of counties, school districts and special districts that would be affected by TIF-financed urban renewal projects. And it encourages the various parties to work out these fiscal issues locally. But the bill does require all the affected governments and districts to have a voice.
The bill, which is also sponsored by Rep. Polly Lawrence, R-Littleton, goes now to the House floor.