Interesting discussions going on lately about Tax Increment Development Districts here on the Fix with Marjorie and elsewhere. KNME’s (Channel 5) In Focus and The Line team of David Alire Garcia and Gene Grant talked about TIDD’s in an excellent show that will be replayed Sunday at 7:30AM. Monday night there is an Albuquerque City Council meeting where TIDDs will be discussed.
TIDDS are a financing tool first and foremost. Each district (and there are no less than 14 potential districts so far) will be created to finance development costs by diverting tax revenues from the budgets of city, county and state governments for that purpose.
It’s about tax money and bonding – a MEGO (My Eyes Glaze Over) topic, to be sure. Bond sales sound so innocuous if you don’t think too hard about management of those 14 different districts. TIDD boosters point out that districts will be overseen by elected boards – each controlling their own pool of borrowed money to be used for construction contracts to build infrastructure. And all of it is exempt from the State Procurement Code. That’s the code that is supposed to prevent kickbacks with construction contracts.
Giddyup. That should keep our few government watchdogs spread thin and dancing fast.
TIDDs make sense if you believe they will bring in NEW jobs to the community that wouldn’t have come in otherwise. No promises, mind you. This requires a serious logic-defying leap of faith. Councilor Cadigan admitted it’s a “gamble”.
Scary that Dan Serrano, a proponent of TIDDs, says that this is “at the forefront of planning” and the Chairman of the local National Association of Industrial and Office Properties, Chuck Gara, announced that “Albuquerque has no sprawl.” He called our growth “orderly.” And I’m thinking ‘what town does he live in?’ and ‘do we speak the same language?’ Their mantra the only direction to grow is west as if it’s Albuquerque’s Manifest Destiny ignores both the location of Mesa del Sol and any development that might otherwise occur.
The State legislation enabling TIDDs was slipped through the 2006 short 30-day session with strong support from developers and little discussion. The ostensive purpose of the broadly worded legislation was to support “economic development and job creation.” But the devilish details as to exactly what that means were totally absent from the bill.
TIDDs will create multiple pools of bond money – each with administrative boards and bureaucratic responsibilities. The staff of the state Taxation and Revenue Department expressed apprehension about TIDD legislation. They noted that the district boards are not subject to the State Procurement Code which protects the public against insider bidding, among other things. Tax and Rev called the administrative provisions “difficult, time consuming and expensive” requiring “major revisions to forms and systems.”
Not only that, the Attorney General’s office stated that the TIDD legislation may represent a violation of the state constitution’s anti-donation clause.
Economist Gerry Bradley said conservative estimates are that these TIDDs will divert $60 million out of the State's General Fund. Concerned about the massive transfer of risk onto the backs of taxpayers in order to create a massive new “profit center” for out-of-state private developers, KNME’s Jim Scarantino posed a question dripping in exasperated irony, “What is wrong with the free market?”
Councilor Cadigan called it gambling on development.
I’m wondering - is this the Matrix?
TIDD Developer: Do not try to change the sprawl; that's impossible. Instead, only try to realize the truth.
Coco: What truth?
TID Developer: There is no sprawl.
Coco: There is no sprawl?
TIDD Developer: Then you will see, it is not the sprawl that needs changing, it is only yourself.