Missoula County Opposes HB 134 Revise school funding related to facilities and request that it be amended to remove the language related to tax increment funding in house education today. Tax increment financing is one of the few tools available to County government to support and encourage economic development in the county. The present funding mechanism allows counties to develop districts that build infrastructure in areas that are infrastructure deficient. Any limitations placed on this financing mechanism will reduce the ability to build public infrastructure, create good paying jobs, and increase the tax base. HB 134 exempts public school equalization mills from the calculation of tax increment. Removing school equalization mills would make it almost impossible to fund infrastructure development and administrative costs for a new district. Most infrastructure projects are financed with the issuance of bonds that are paid with increment generated in the district.
In addition, the bill seems to assume that all expenses in a tax increment district are paid with bond proceeds. However, while much of the infrastructure costs are often financed with the issuance of bonds administrative costs and some infrastructure costs are paid directly with increment.
Excluding the 95 mills from the TIF calculation would increase the equalization fund by 1.9% or $4.8 million. However, individual TIF Districts would lose an average of 16.8% (based on the average number of total mills levied across the state) of their increment annually. This would reduce the ability of local governments to fund infrastructure in support of sorely needed economic development. In the end, while the schools may see a 1.9% increase in equalization funds state-wide in the short term, economic development would be hindered, ultimately affecting local school budgets in the long term.
Sent Feb. 7:
ReplyDeleteRepresentative Bennett:
Missoula County Opposes HB 134 Revise school funding related to facilities and request that it be amended to remove the language related to tax increment funding in house education today. Tax increment financing is one of the few tools available to County government to support and encourage economic development in the county. The present funding mechanism allows counties to develop districts that build infrastructure in areas that are infrastructure deficient. Any limitations placed on this financing mechanism will reduce the ability to build public infrastructure, create good paying jobs, and increase the tax base. HB 134 exempts public school equalization mills from the calculation of tax increment. Removing school equalization mills would make it almost impossible to fund infrastructure development and administrative costs for a new district. Most infrastructure projects are financed with the issuance of bonds that are paid with increment generated in the district.
In addition, the bill seems to assume that all expenses in a tax increment district are paid with bond proceeds. However, while much of the infrastructure costs are often financed with the issuance of bonds administrative costs and some infrastructure costs are paid directly with increment.
Excluding the 95 mills from the TIF calculation would increase the equalization fund by 1.9% or $4.8 million. However, individual TIF Districts would lose an average of 16.8% (based on the average number of total mills levied across the state) of their increment annually. This would reduce the ability of local governments to fund infrastructure in support of sorely needed economic development. In the end, while the schools may see a 1.9% increase in equalization funds state-wide in the short term, economic development would be hindered, ultimately affecting local school budgets in the long term.
Please amend HB 134 to exclude TIF funding.
Missoula County's concerns for HB 134 have been addressed through the amendments.
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