SWOPblogger

Folks are gettin' a little TIFed about TIDDs

The following LTE appeared in the Farmington Daily Times. I hear a longer version was published in the Jemez Thunder too (not available online).

Editor:

You would think billion-dollar expenditures of our tax money would generate more public discussion about the purpose and alleged benefits. But Tax Increment Development Districts, or TIDDs, are funded in a way that is not transparent to the public — even though it's the public's money.

Now, big out-of-state developers can use state tax revenue to develop the greater Albuquerque area, otherwise known as sprawl. Laird Graeser, chief economist for the New Mexico Department of Finance and Administration, put it this way: "In effect, (the SunCal TIDD) is a capital outlay project that will only benefit residents of the project area and the near surrounding areas, but it will be funded by all the taxpayers of New Mexico through lower levels of state services."

On Jan. 16, 2007, the New Mexico State Board of Finance approved a TIDD for Mesa del Sol in Albuquerque. More than $1 billion of state gross receipts taxes will pay for the streets, water lines, etc., to develop this huge project. The $1 billion will subsidize the biggest new real estate development in New Mexico history, and one of the largest and most prosperous real estate developers in the country.

The state of New Mexico will do something it's never done before: pay for new growth and water demands in the Albuquerque Rio Grande Corridor! And it will do so with tax money from Las Cruces, Silver City, Farmington, and every other New Mexico community.

SunCal Corporation has purchased the Westland property on Albuquerque's west side that is five times the size of the MdS project and SunCal wants the same deal. The Verde Group, an El Paso-based real estate developer, has applied for a TIDD in Santa Teresa.

The state TIDD law must be amended to remove new developments on undeveloped land from the TIDD subsidy. The state has no business subsidizing growth in already expanding and affluent local communities.

The 2008 session is a "short" session. But Mesa del Sol managed to get their TIDD bill passed in the "short" 2006 session. We know that 30 days is enough to make the TIDD bill right.

Call, write, e-mail or meet with your senator and representative. Tell them to remove new "greenfield" developments from the TIDD law and protect your interests, not the interest of big developers in Albuquerque.

ERIC SCHMEIDER
Board Member
SouthWest Organizing Project
Albuquerque

Mesa del Sol has made it into Wikipedia’s entry on TIF:

Currently, the largest TIF project in America is located in Albuquerque, New Mexico: the $500 million Mesa del Sol development. Mesa del Sol is controversial in that the proposed development would be built upon a "green field" that presently generates little tax revenue and any increase in tax revenue would be diverted into a tax increment financing fund. This "increment" thus would leave governmental bodies without funding from the developed area that is necessary for the governmental bodies' operation.

http://en.wikipedia.org/wiki/Tax_increment_financing

From Good Jobs First Email:

New Mexico allies ~ thanks to Michael Mazerov at the Center for Budget and Policy Priorities for flagging this Fidelity Investments news (below) FYI: Fidelity is notorious for its state-vs-state tax-dodging behavior in Massachusetts and neighboring states; see pages 98-100 at: http://www.greatamericanjobsscam.com/Chapters/Chapter4.pdf

Wall Street Journal Coverage:

Fidelity Will Open Center in New Mexico State Offers $47 Million In Tax Breaks, Sweeteners; Ten Other Regional Centers

By JENNIFER LEVITZ
January 18, 2008; Page C13 BOSTON -- Fidelity Investments, known for making Boston one of the nation's centers of mutual funds, now plans to put a large imprint on New Mexico. The company said it plans to lease a new 210,000-square-foot operations center in Albuquerque that will house 1,250 employees, under an agreement in which the state will provide $47 million in tax incentives and other sweeteners.

It isn't the first time Fidelity has ranged afield from Massachusetts. It has made several deals to snare tax benefits from states in return for employment promises. Fred Mondragon, New Mexico's secretary for economic development, said the $47 million package includes tax breaks, job training for new employees and a $14 million "cash incentive" for the building of infrastructure -- with the incentive costs shared by the state and local governments.

Fidelity's new facility will be part of Mesa del Sol, a 12,900-acre mixed-use facility co-developed by a unit of Cleveland-based Forest City Enterprises Inc. Fidelity said the positions will mostly be new jobs in human-resources services, its division that handles payroll and other functions for companies. Fidelity spokeswoman Anne Crowley said, "It is largely new recruiting and hiring out in that region that will staff the site."

Fidelity doesn't currently have operations in New Mexico. The company, with 44,000 employees, has 10 regional operations centers across the U.S. -- in Florida, Kentucky, Ohio, New Hampshire, New Jersey, New York, North Carolina, Texas, Rhode Island and Utah. In 2006, North Carolina awarded Fidelity the largest corporate tax deal in the state's history -- a $54.6 million tax-incentive package based on Fidelity's plan to invest $100 million in a new facility and to bring 2,000 jobs to the state. Write to Jennifer Levitz at jennifer.levitz@wsj.com.

Labels: TIDD