Clean Energy News

Rules Would Have Allowed for More Oversight, Protection of Public Interest

Contact:

Anne Stauffer, NM Voices for Children (505) 244-9505

Lauren Ketcham, Environment NM (505) 254-4819

Santa Fe, NM—Since approving the use of state taxes in two developments—Mesa del Sol and SunCal—which will divert more than $1.1 billion in state gross receipts taxes (GRT), the Board of Finance met today to consider new rules for future proposals. The Board voted unanimously to postpone voting on the rules until its September 16th meeting.

“TIDDs change the development equation by risking public money for private profit,” said Lauren Ketcham, an advocate with Environment New Mexico. “The Board should ensure that the rules provide the strongest possible public protections.”

The Board postponed the vote, citing significant and detailed public comment from many different groups.

Tax Increment Financing (TIF) is an economic development tool that is generally used as an incentive for redevelopment in urban areas that have fallen on hard times. New Mexico’s TIF statute, passed in 2006, allows a tax increment development district (TIDD) to negotiate a deal to receive up to 75 percent of the incremental increase in state GRT revenue resulting from the improvement within the district. This dedicated revenue stream can last for up to 25 years. 

More than 25 organizations and individuals, including New Mexico Voices for Children, Community Action New Mexico, Environment New Mexico, Conservation Voters New Mexico, AFSCME, the Southwest Organizing Project, the American Federation of Teachers, the Quality Growth Alliance, 1000 Friends of New Mexico and the League of Women Voters, submitted comments to the Board which expressed concern that the TIF statute does not include enough guarantees that the tax revenue will be spent with the public’s best interest in mind. The groups supported the adoption of the Board of Finance’s draft rules, while proposing strengthening amendments for transparency and taxpayer protections. Those comments are attached to this release.

“Our comments demonstrate state-wide, broad-based concern about Tax Increment Financing in New Mexico,” said Anne Stauffer with New Mexico Voices for Children. “The Board of Finance’s rules should ensure that the Board has adequate information on future TIDD proposals, provide predictability to applicants, increase the transparency of the use of public tax dollars and help to ensure that TIDDs are delivering on important public policy goals and not undermining funding for critical state-wide programs.”

The Board of Finance draft rules incorporates important guidelines and requirements that would take into consideration whether the proposal is for redevelopment versus greenfield development on undeveloped land, require greater developer disclosure and ensure more in-depth analysis of the economic impacts of the proposal.

Among other things, the Board of Finance rules would require the Board to:

-         Receive more information from those submitting the proposal, including an economic development plan, a market feasibility study, an economic analysis, net revenue analysis, a detailed timeline, audited financial statements from the project’s developers, and an approved master development agreement;

-         Evaluate whether the project could occur in “substantially the same form” without a dedication of state GRT;

-         Determine if the TIDD will have a positive revenue impact on the state General Fund over the life of the bonds;

-         Ensure that the TIDD plan includes adequate “planning and resource allocation” for workforce housing and schools;

-         Ensure that the state GRT increment requested is the “most prudent amount possible”;

-         Determine if the developer has a proven record for success with similar developments;

-         Assess the impact on surrounding or non-participating government entities;

-         Ensure applications include “environmentally protective technologies,” energy and water efficiencies, and sustainable development elements; and

-         Consider the availability of water and water rights.

The Board of Finance is the only state body with the authority to approve or deny state GRT-backed TIDDs. After the Board of Finance has approved a project, the New Mexico Legislature authorizes the corresponding bonds.

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New Mexico Voices for Children is a progressive, non-partisan organization that advocates for the health and well-being of children, families and communities in New Mexico. www.nmvoices.org

Environment New Mexico is a state-wide environmental advocacy organization working to protect New Mexico’s air, water and open spaces. www.EnvironmentNewMexico.org