(April 20) – The House gave final approval today to Speaker Dickey Lee Hullinghorst’s bill to level the playing field between cities and other local governments – school districts, special districts and counties — when it comes to financing for urban renewal redevelopment projects.
Urban renewal projects are paid for with what’s called tax increment financing, in which a city or its urban renewal authority issue bonds to redevelop a blighted area, then uses all of the increment — the additional property taxes generated by the enhancement of the property — 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 the budgets of other taxing agencies, and those agencies have no say in how those TIF funds are spent.
HB15-1348, sponsored by the speaker and Assistant Minority Leader Polly Lawrence, R-Littleton, would require that if the local governments cannot agree on the use of their taxes, the city is required to put into the project the same proportion of its revenue (which mostly comes from sales taxes) as would be diverted from the local governments’ property taxes.
“This bill really is a protection for taxpayers to ensure that the money that they spend in their property taxes goes in the direction that they really believe it’s going to go,” Speaker Hullinghorst, D-Boulder, told the chamber this morning. “There’s no better way to do that than having all of the tax entities who are responsible for those tax dollars to be at the table to make the decision about how those dollars will be spent on an urban renewal project.”
The bill also 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.
Today’s 44-19 vote sends the bill to the Senate