A UALR staff member has studied and pronounced wonderful the idea of using a Tax Increment Finance District to subsidize a major redevelopment of largely fallow acreage in the Baring Cross section of North Little Rock.
Or so says a news release distributed by a public relations agency helping to support the idea.
I need to do some more studying. I agree that the blighted Baring Cross area is a proper target for the TIF tool. And, if successful, it would build value by adding residences and supporting businesses, not merely subsidize a new retailer to compete with existing retailers.
I’m anxious to hear more on the numbers. With construction value of $116 million at buildout, I don’t understand how they can compute a $25 million tax benefit to the local public schools over 25 years. The entire NLR property tax base — for schools, city, county, hospital, police and fire, etc. — would only produce about $1.1 million a year in taxes in that amount of new construction, assuming that amount is achieved. Schools would get about half that annually, at most.
You have to wonder a little about the reliability of this information since it says here that this would be the first TIF district in the state. That’s not right. One is up and running in Fayetteville. (How could I have forgotten that one, since it formed the test case for using school taxes.) I think they also were formed in both Paragould and Jonesboro, though both those were dealt body blows (in terms of expected tax subsidies) when the Supreme Court said the 25-mill base school millage couldn’t be diverted from schools to private projects such as these. In North Little Rock, there’s a free 3.7 mills of school tax that the developers can seize for infrastructure work, though I’d still argue — absent a court decision to the contrary — that the Constitution prohibits conversion of taxes voted for schools to any use other than schools.
No matter, looks like this project is on Mayor Hays’ fast track.
PLEASE NOTE: This is NOT a UALR news release. The UALR official who directed the study will be leaving the school at the end of this semester. The news release notes the study was “commissioned” by North Little Rock, meaning the mayor, meaning it was commissioned by someone looking for support for the idea, it seems to me.