Monday was the deadline to file legislation for this session. But the 11th-hour antics and Hail Mary legislation had begun a few days earlier.
One legislator wants to prevent the public from being able to walk into a public agency to request a public document. More creation science funny business arrived. The Oaklawn slot machine bill appeared. Some dearly beloved liberal legislators in Northwest Arkansas proposed that Arkansas ratify the Equal Rights Amendment for women and protect gay people from discrimination on account of their sexual orientation.
But here’s a late-developing battle that deserves serious attention.
It’s the shakeout of Tax Increment Financing. TIF is a constitutional scheme dreamed up by a bond lawyer that allows city governments — all of which have a hard time persuading constituents to raise taxes — to poach the increasing property tax revenues from other government agencies, chiefly public schools, to subsidize private development.
The scheme works only in prosperous areas with big tax bases. Developers in Northwest Arkansas, Jonesboro and North Little Rock had proposed millions in TIF-subsidized projects. Then Attorney General Mike Beebe threw a curve ball. He said the first 25 mills of school property tax was a state-mandated millage. Under the statute, he said, this was a state tax that could not be used for any purpose but schools. That’s where most of the developers’ TIF money was to come from.
Enter state Rep. Dustin McDaniel and Sen. Jerry Bookout of Jonesboro. That city happens to be home to developer Bruce Burrow, who wants TIF benefits for projects in Jonesboro and North Little Rock. Their bill (and a bill still in shell form by Sen. Dave Bisbee of Rogers) says state property taxes also could be captured to help Burrow build his fancy Jonesboro mall and the Bass Pro Shops center in North Little Rock. Their bill says the money could be used for any project that creates jobs (even if it causes the loss of jobs somewhere else). It expressly allows developers to tap school taxes to build highways, certainly a pressing need of the state’s lagging school children. The area covered by TIF districts need not even be contiguous. The bill would let developers hopscotch around town to cherry-pick projects and properties they’d like to improve with taxpayer money. Limits? None. The money could be spent anywhere on “any other projects the local governing body deems appropriate.”
Sen. Tim Wooldridge of Paragould has the antidote to this special-interest poison. His bill would clean up TIF authorization. It would allow its use only to help blighted areas (as demonstrated by declining property values). He’d establish a test in which a project couldn’t get TIF money unless it would fail without it.
Wooldridge’s bill would require bond issues of no longer than 10 years, cutting from 25 years the time a school district or other agency could otherwise be deprived of the growth in property tax revenues by a TIF district.
Wooldridge’s bill makes perfect sense. It really would address blight — the promise by which TIF was initially sold. We now know the promise was a lie. The real objective was to line the pockets of developers and bond lawyers and spare cities from asking for tax increases. If Wooldridge’s bill does no more than beat the McDaniel/Bookout/Bisbee bills, it will have done its work.
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