Incentives encourage New Mexico land rush
An economic development tool available to local governments and
developers is threatening New Mexico communities. Tax Increment
Financing (TIF) was originally created as a way to encourage
reinvestment in older, blighted areas that were too risky or costly for
private investors. These geographically defined areas, called Tax
Increment Development Districts (TIDDs), capture tax revenue and
incentivize sprawl.
An easy target
New Mexico’s Tax Increment Development Act, passed in 2006, created
one of the most generous TIF arrangements in the country, allowing for
capture of state, city and county sales and property taxes. As a
result, Albuquerque’s SunCal and Mesa del Sol TIDDs are the largest in
the country—encompassing 70,000 acres and diverting $1.1 billion
dollars in state money alone.
How TIF works
A development district negotiates a deal with the city, county and
state government to receive a percentage of the future tax revenue
generated in that district—up to 75 percent of the incremental increase
for up to 25 years with very little state or local oversight.
When
and if the property in the district increases in value and sales
revenues rise, the money is used to pay the developer for the costs of
infrastructure and planning.
Loss of land, quality of life
Originally developed to promote urban infill development, TIDDs are
now being used to subsidize sprawling “greenfield” development—areas on
the fringes of the city. These developments are contributing to sprawl,
loss of open space, global warming and poor air quality.
“As
inefficient patterns of development eat up open space on the edge of
developed areas, we lose the natural character of our state. We wind up
spending more time sitting in traffic, our inner core deteriorates and
our quality of life suffers,” said Environment New Mexico Advocate
Lauren Ketcham.
Further, vehicle emissions are the second
largest source of carbon dioxide emissions in the state. Development on
the city’s edges increases the number of vehicles on the road and the
number of miles traveled per driver.
“Cars, trucks and SUVs are
already the fastest growing source of global warming emissions and the
leading source of smog-forming emissions in New Mexico. Incentivizing
developers to build on our city’s fringe will only make these problems
worse,” said Ketcham.
Environment New Mexico is working to
provide the leadership needed to protect open space, reduce global
warming and preserve the quality of life that TIDDs threatens.
“We
are working to build support at the local and state levels in order to
rein in some of the worst abuses of TIF and ensure that no new
greenfield TIF deals are approved,” concluded Ketcham. Environment New
Mexico helped to defeat a $629 million bond authorization for SunCal
during the 2008 legislative session.
Take action: Tell Governor
Richardson and Lt. Governor Denish to support TIDD rules. Click here.
