New Tax Incremental Financing law

A new law to extend troubled TIF districts from 27 years to 40 years in response to some Tax Incremental Districts (TIDs) around the state running into trouble. While some larger municipalities have the ability to use revenues from successful TIDs to cover another underperforming TID, smaller municipalities not having enough TIDs to share the pain do not have that luxury. Hence the change.

Interestingly, it only covers TIDs created before Oct 1, 2008. So this seems to be intended to be a temporary measure due to the current economy, rather than being a permanent tool for future distressed TIDs.

This new law not only extends the life of a distressed TID, but it also allows communities to extend the life of a "donor" TID (one that is being used to help pay off the troubled TID) up to 40 years after it was created, although it must terminate as soon as the distressed TID is paid off. It also expands the definition of a distressed TID to include mixed-use or industrial districts. Previously, distressed districts had to be blighted, for low-income housing rehab, or for environmental clean-up in order to receive money from a donor TID.

I suppose this law is useful in that it allows communities to avoid defaulting on their debt, although I don't think some communities have used Tax Incremental Financing the way it was originally supposed to be-for redeveloping blighted areas. Corn and trees are not blight.

Update: This was the website's 100th post according to Blogger. If I'd known, I'd have chosen something more exciting!