Iowa lawmakers look to reform TIF incentives - KWWL - Eastern Iowa Breaking News, Weather, Closings

Iowa lawmakers look to reform TIF incentives

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IOWA CITY (KWWL) -

Change is needed - that's the word from many Iowa lawmakers in regards to a popular economic development tool.

The state's tax increment financing program, or TIF, has come under fire lately after some say the program is being abused.

 

The tipping point may have come from Coralville's use of the incentive on its Iowa River Landing project.

The city used more than $10 million in incentives to lure Von Maur from Iowa City to its district.

Governor Terry Branstad told the Des Moines Register the agreement was abuse of the program.

Coralville city leaders say they've followed the law.

The debate has prompted lawmakers toward looking to reform the program.

The 14-story Plaza Towers is unlike any other architecture in downtown Iowa City.

"You could do student housing on that site without any incentive, but it doesn't bring in anything new to the city," says developer Marc Moen.

Moen says without the use of tax increment financing, the structure would have never been built.

Moen was given $6 million of TIF funds from the city only after he was able to show he could payback his debt.

"They do an analysis showing that this project is going to be awarded this amount of money because it will sustain or cover the debt on that TIF money," said Moen.

 

Currently, there are more than 1500 projects like Moen's throughout the state using TIF financing.  In fact, it's the largest tool for economic growth in Iowa.

The problem, lawmakers say, is there is little oversight of the program from the state...and some cities are using TIF irresponsibly...taking on large amounts of debt on the taxpayer's dime

"There have been some abuses and I think it's time now to try and refocus our efforts to try to make TIF work better for our communities," said state senator Joe Bolkcom, (D) Iowa City.

 

Senator Bolkcom is seeking public input on how to improve TIF...inviting the public to a series of forums to weigh in.

One of the more popular ideas from Saturday morning's session is to create stricter guidelines on the incentive's usage.

"If there's a project that won't happen unless TIF is involved, then we should move forward and allow TIF to be used," said Bolkcom.

 

Still, Moen's development serves as a reminder of TIF's value as an economic engine for a community - bringing in something new while growing the city's tax base.

"It paid off in four or five years and now the city gets approximately one million dollars in taxes," said Moen.

 

A bill has been introduced in the Iowa House that proposed changes to the current TIF program.

Lawmakers say there is bipartisan support to move some sort of change forward.

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