State Rep. Chris Hagenow’s Capitol Update: Committee Looks at Potential TIF Abuses

On Thursday of last week, our Government Oversight Committee heard testimony about the use of Tax Increment Financing (TIF) in Coralville, primarily for the Iowa River Landing project. Legislators have recently heard from many people who are concerned about potential abuses of TIF, with Coralville getting the most attention.

What kind of letter grade should Iowa get for treating and caring for victims of child abuse? Tell us in comments.

TIF allows cities to add to their overall tax base by borrowing against the future increase in valuation that comes from redevelopment. While this has been a very useful tool for many cities (including in our area), we also have to consider whether there should be limits placed on the amount of debt a city can accumulate under TIF, and also if there needs to be a limit on the length of time TIF debt obligations should remain outstanding.  

For example, the City of Coralville carries well over $200 million in TIF debt, amounting to about $12,000 per citizen.  Also, the city is not scheduled to repay the TIF debt for another 30 years. Another downturn in the economy could put a tremendous burden on the city’s finances.  

We also need to consider whether or not cities should use publicly funded projects to compete directly with private business and also question if cities should use TIF to poach existing businesses from nearby communities. Coralville has been using its own Iowa River Landing Project to proactively take tenants away from other places, most notably Coral Ridge and Sycamore malls.

Both the House and Senate Ways and Means Committees are working on bills to reform our current laws on TIF. The results of our hearing will be shared with the House Ways and Means Committee, to help them put together new guidelines for TIF that allow cities to keep this tool, while also adding safeguards for taxpayers. 

Although this can be a difficult and controversial issue to deal with, I believe that we will be able to find common ground to make the system better. The media did a fair job of reporting our hearing, and here are a couple of good articles that provide additional background: Des Moines Register - Citizens group urges restrictions to TIF law  and Iowa City Press Citizen - Coralville and TIF under microscope

Also, I highly recommend the following study from Peter Fisher of the Iowa Policy Project to anyone who has a particular interest in TIF: Iowa Policy Project - TIF in Johnson County

Regional Child Protection Center
The House Public Safety Committee was fortunate last week to have representatives visit from the Regional Child Protection Center at Blank Children’s Hospital. This clinic provides examination and assessment of abused children and works closely with law enforcement and the court system to help protect abused and neglected children.

In 2010, Iowa had 12,595 children confirmed as being abused. Over 50 percent of these victims of child abuse were under 6 years old. Iowa’s Child Protection Centers operate under a nationally recommended, multi-disciplinary model incorporating the Department of Human Services, law enforcement officials, county attorneys, victim advocates and medical and mental health professionals.

The folks at the Regional Child Protection Center do a tremendous job with these children who are exposed to heart-breaking abuse. Treating and caring for victims of child abuse should be a priority for state government.  Blank Children's Hospital - Regional Child Protection Center

DOT Efficiency Report
At the request of the governor, Department of Transportation (DOT) Director Paul Trombino released the finding of a study to find cost savings within the department. The report identified 13 efficiencies with total savings projected at $50 million. The goal of the report was to find efficiencies in order to free up more money in the Road Use Tax Fund for the improvement of the public roadway system.

Some of the program efficiencies include an assessment of rest area and weigh station investments ($1.5 million annually), a reduction in roadside vegetation improvements ($1 million annually), and the selling of unnecessary right of way parcels ($1 million in one-time). Other savings include a one-time $11 million through the implementation of an asset management tool, which would help the DOT make better decisions on how and when to upgrade and maintain their physical assets.

Similarly, the department found $10 million in savings annually that envisions the implementation of new budgetary management policies focused on post-letting project costs. The goal would be to deliver projects ahead of schedule and under budget.

Some of these efficiencies will require legislative action, or action by the Transportation Commission. Some will simply require cooperation at the county or local level. A full copy of the report released this week—which includes details on the efficiencies, and whether or not the efficiency requires legislative action—can be found here:

I commend the DOT for their efforts to find efficiencies in state government. This is what every department and every agency should be submitting to Iowans, a plan to save taxpayer money while preserving core services.

Contact Me
As always, I look forward to hearing your comments and ideas. Please feel free to contact me anytime!

Representative Chris Hagenow
State Capitol
East 9th and Grand Ave.
Des Moines, IA 50319
(515) 281-3221
www.chrishagenow.com
chris.hagenow@legis.state.ia.us