The use of TIF districts has fallen sharply in Minneapolis, and all over MN. TIF remains a very valuable tool in a city's redevelopment toolbox, when it comes to spurring redevelopment that has a financing gap, in blighted/distressed areas, or needs public improvements to go along with the development. It's good to see cities not so dependent on it though, tying up large portions of their tax base in TIF distrits.
TIF debuted as a tool in the 1970s and has been used to pay for development in blighted areas where it wouldn’t happen “but for” the public assistance. Critics worry about the method’s true benefits, because it diverts increased tax revenues, or “increments,” for up to 25 years.
The total number of TIF districts across the state fell 5 percent in 2013, the latest year for data, to 1,732. That number is down from 1,981 districts in 2009, according to a previous Finance & Commerce report.
In each year since 2009, the number of expiring old districts outpaced the creation of new ones. The number of existing TIF districts has dropped every year since 2004, when it topped out just over 2,200.
The districts captured about $201.8 million in revenue in 2013, down from $312.8 million in 2009. About 35 percent of the state’s TIF districts are in metro-area counties.
In Minneapolis, the percentage of the city’s tax base tied up in TIF arrangements has dropped from 15.7 percent in 2003 to 8.6 percent in 2014.
“Minneapolis is following similar trends to what we’re seeing throughout the state,” Sandy Christensen, deputy chief financial officer for the city, said Thursday. “We’re reducing our use of TIF.”
The city now has 79 active TIF districts, down from its peak of 101 in 2008. The vast majority of those districts — 77 of them — are for either housing or redevelopment projects.
Read more:
http://finance-commerce.com/2015/01/use ... statewide/