Rules Would Allow for More Oversight, Protection of Public
Interest
Media Advisory
Contact:
Anne Stauffer, NM Voices for Children (505) 244-9505
Lauren
Ketcham, Environment NM (505) 254-4819
Who: New Mexico Board
of Finance
What: Vote on draft Tax
Increment Financing (TIF) rules
When: Tuesday July 22, 9:30 a.m.
Where: State Capitol Building, Room 315, Santa Fe, NM
Why: 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 has drawn up new rules for future proposals. The Board will vote on the
rules July 22.
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.
A diverse group of
community organizations has 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 comments they filed with the Board are attached to
this release.
The Board of Finance
draft rules incorporate 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.
Additional Contacts:
Olivia Padilla-Jackson, Director, Board of Finance: (505)
827-4980
Laird
Graeser, Chief Economist, Department of Finance and Administration: (505)
827-4377
Paul Gessing, Director, Rio Grande Foundation: (505) 264-6090
Michael Cadigan, Albuquerque City Councilor: (505)
768-3100
Joint-Comments-on-BOF-TIDD-rulemaking-July-2008.pdf