State Auditor Julie Blaha Releases Tax Increment Financing Legislative Report: OSA Helps Return $6.1 Million to Counties
For Immediate Release
March 05, 2020 |
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Contact
Donald McFarland | 651-236-0494 |
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Saint Paul, MN – Earlier today, State Auditor Julie Blaha released the Tax Increment Financing Legislative Report. The Report was compiled from information received from development authorities currently exercising tax increment financing (TIF) powers in Minnesota. The Report summarizes information reported by 408 development authorities for 1,651 districts for the calendar year ended December 31, 2018. “I’m happy to report that OSA oversight helped return $6.1 million to county auditors in 2018. These resources are now available for redistribution as property taxes to cities, counties, and school districts,” said Auditor Blaha. Blaha continued, “In 2018, approximately $230 million of tax increment revenue was generated statewide, an increase of 14 percent over 2017. This increase occurred despite almost no change in the total number of TIF districts, and the overall volume of TIF districts appears to be stabilizing after a general downward decline in their numbers since 2004.” The annual reporting summarized in the Report is an important component of the Office of the State Auditor’s oversight activities, which seek to promote compliance and accountability in local governments’ use of tax increment financing through education and monitoring. The Report also provides a summary of the violations cited in the limited-scope reviews conducted by the Office of the State Auditor (OSA) in 2019. In addition, OSA oversight helps ensure that districts decertify (terminate) in a timely manner. At times, districts must decertify prior to their maximum statutory duration limit, which can be for as long as 26 years. From 2014 to 2018, housing districts decertified early 81 percent of the time. Redevelopment districts decertified early 60 percent of the time, a rate that appears to have increased over recent years. “Decertification of a TIF district results in the previously captured value becoming available to support local property tax levies, which can help reduce property tax rates or expand levying capacity,” added Blaha. Tax increment financing is a financing tool established by the Legislature to support local economic development, redevelopment, and housing development. As its name suggests, TIF enables development authorities to finance development activities using the incremental property taxes, or “tax increments,” generated by the increased taxable value of the new development. The Report describes the types of TIF districts, financing methods, and various statistics. xxx
The Office of the State Auditor is the constitutional office that oversees nearly $40 billion in local government finances for Minnesota taxpayers. The Office of the State Auditor helps to ensure financial integrity and accountability in local government financial activities. Julie Blaha is Minnesota’s 19th State Auditor. Follow us on Twitter @MNStateAuditor. |