(MCT) — A bill to reform the use of tax increment financing (TIF) was approved 15-10 by the House Ways and Means Committee April 8.
Chairman Tom Sands, R-Wapello, said it would end TIF-financed public buildings, restrict city debt from exceeding 5 percent of the taxable value in the city – including the TIF districts — and prohibit future TIFs from extending into perpetuity.
HSB 675 is opposed by associations of developers, community colleges, counties and cities.
The League of Cities, which issued a “call to action” to its members ahead of the Tuesday committee meeting, has argued only nine projects involving TIF-financed public buildings were started in 2013. Such projects often lead to economic development and stabilization in slum and blight areas, according to the League, and often are requested by businesses and property owners in those areas.
The debt restriction section of the bill would have a disproportionate effect on small cities and prevent them from leveraging dollars for large economic development projects, according to the League. In fiscal 2013, roughly 27 percent of projects used annual appropriation debt and more than half of these projects are in cities under 5,000 in population.
The bill, which is backed by the Iowa Farm Bureau and Iowa Taxpayers Association, is now eligible for consideration by the House.
Although he supports Sands’ efforts, Senate Ways and Means Chairman Joe Bolkcom, D-Iowa City, said it’s late in the session to take up the bill.
“It’s a long way from a House committee to the Senate floor,” he said.
©2014 The Gazette (Cedar Rapids, Iowa)
Distributed by MCT Information Services