Chart of the Day: TIF Comparison for Minneapolis and selected suburbs

Tax increment financing (TIF) is funding mechanism used by cities to aid redevelopment. Controversial at times, some cities make greater use of it than others. Over the years, Minnesota’s laws regarding how TIF can be used have changed. Cities with significant redevelopment areas tend to make greater use of TIF than more stable cities.

Example: In the agenda for Saint Louis Park’s City Council work session on October 26th, there is a chart comparing “Captured TIF as a % of Tax Base” for several Twin Cities municipalities, as well as city bond ratings and the tax rates.

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The work session report has additional information about how Saint Louis Park is using TIF today under current state law and how the market value of all the active TIF districts have appreciated since their start dates. To date, the market value of Saint Louis Park’s active TIF districts has increased +750%.

Bonus Map!

I always like a good map, and the TIF report in the work session agenda did not disappoint. Here is the map of all of Saint Louis Park’s active AND proposed TIF districts in 2015.

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4 Responses to Chart of the Day: TIF Comparison for Minneapolis and selected suburbs

  1. Kristen Schade October 25, 2015 at 8:53 am #

    Excuse me if this should be obvious to me, but what does the column reading, “city tax rate,” actually mean. There is quite a difference from one city to another. Also, how long does Tax Incentive Financing status usually last for these developments, is 5 years pretty standard? Thanks!

  2. Eric Anondson
    Eric Anondson October 25, 2015 at 10:56 am #

    My understanding that with TIF, Tax Rate involves all the property taxes in the district. That is, city, county, school districts, special taxing districts, watersheds, … that stuff.

    The durations of the TIF districts vary. For instance, the Park Center housing district was approved in 1996 and is anticipated to last until December 2023. Housing TIF districts are intended to aid housing for disadvantaged groups and what I understand is that funds in them can even be used for funding housing disadvantaged groups outside the housing TIF district.

    The Aquila Commons district, also a housing district, was approved in 2004, is anticipated to term in 2018, but has a legal maximum term until 2032.

    The Ellipse district is a redevelopment district, approved in 2009, anticipated until 2022, but it looked like the city has generated so much revenue from it is expecting to close it far sooner.

    The Shoreham proposed redevelopment district would be approved in 2015 but is anticipated until 2020.

    The proposed 4900 Excelsior (Bally’s site) would be a redevelopment district approved in 2015 and anticipated until 2023.

  3. David Markle
    David Markle October 25, 2015 at 11:38 am #

    The TIF reform enacted some years ago reduced TIF’s sucking of property tax revenues away from education. That was a very good change although the Legislature should also have set up a financial buffer to make public schools less subject to fluctuations in the state’s general tax revenues (and the budgetary quarrels that often take place at state level). I believe county programs remain in the swath cut by TIF.

    Dangers of other abuses remain, such as the stretching of criteria for application of TIF, and the renewal of expired districts to create municipal off-budget funds (as Minneapolis did with the creation of the NRP program, whatever one may think of the value of NRP).

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