SWOPblogger

The headline of Eric Seimer’s piece in the Tribune yesterday, “City Councilor Michael Cadigan’s Bill Could Aid Developers” is a touch disingenuous. The fact of the matter is that the NM legislature aided developer’s in a big way last year when it passed enabling legislation allowing the creation of Tax Increment Development Districts (TIDDs). The Albuquerque City Council followed suit quickly and passed an ordinance allowing municipal TIDDS, and then Bernalillo County passed their own TIDD legislation just last month.

What is a TIDD?

We've written about this before on SWOPblogger, but it's so complex that it warrants revisiting. Such districts allow developers to take a percentage of that developed area’s Gross Receipts Taxes for the duration of the TIDD, which could be decades. The State, City, and County legislation all allow up to 75% of gross receipts tax to be given to the developer. We can expect to see the formation of TIDDs in other areas of the state in the coming year as well.

The rationale?

TIDDs utilize a concept known around the country in development/finance/planning circles as Tax Increment Financing (TIF). TIF historically is meant to promote economic development in a given area, and up to now it’s been primarily used in blighted areas. Indeed, the rationale in New Mexico is that an infusion of public dollars is warranted if it spurs economic development.

In a TIDD, the public tax money given to the developer is to be used to pay off the costs of the infrastructure that the developer had to build. Historically, and in developments without TIDDs, infrastructure has always been paid for by the developer. So, in essence, this is a massive shift of public tax money to private development. The HUGE problem is that New Mexico legislation has enabled the creation of TIDDs in “Greenfield” areas…vast expanses of empty land that 30 years from now may be mini-cities in their own right.

Think about it for a moment. If the major land development in the state in the next 30 years is covered by TIDDs, what happens to the State’s general fund, which serves all residents of the state? In Albuquerque/Bernalillo County what happens in 20 years when the gross receipts taxes collected outside the TIDD is insufficient to meet the demands of the greater city/county? These are very serious questions.

If Cadigan’s attempt to remedy this situation is flawed, it’s because he’s attempting to amend the legislation to make it “better” rather than eliminate it entirely.

The City, the County, the State…should all seriously rethink this transfer of our public tax revenue to developers. Those of us who feel strongly that this is massive public support of sprawl development are caught in a difficult spot. We’re told there aren’t votes to roll it back so we need to get on board with improving the legislation to ensure that TIDD development agreements include mandates for the creation of such things as mixed used and workforce housing, transit oriented byways, and the recruitment of a certain percentage of small businesses.

Let’s be clear: the thing to do is to not create TIDDs in the first place.

But if they are going to be created, we are obviously becoming "owners" of the development ourselves. And in that case we have even more of a right than we currently have as a community to demand that a development be designed to meet our broader collective needs. Cadigan’s bill may change over time, but the end result will make the ordinance a much stronger guide for the city planners who will be haggling over the details with developers. The City Council should get on board with it, and the County and State should follow suit...short of the best, and right, solution, which is to roll back this legislation in the first place.

# posted by marjorie @ 7:40 AM