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Reforming the TIDD Gravy Train...Make that call!

While we're debating presidential elections and hashing the movies, the State Legislative Session is in full swing and many New Mexicans are only thinking about the many issues currently being debated at the Roundhouse. One of them is particularly dear to my heart.

Today House Bill 451 is being heard in the House Judiciary Committee at 1:30pm. HB 451 is a bill that would reform the state TIDD legislation, which is the original opening of what can only be considered a Pandora’s box of massive tax subsidies to large corporations.

Please call members of the Judiciary committee this morning and ask them to support the bill, the details of which you can find on SWOPblogger.

HB 451 doesn’t do away with TIDDs, but it does lower the allowable percentage considerably, and it attaches accountability measures to TIDDs given in Greenfields. In this sense, it represents compromise. A lot has been written
about TIDDs in the past year, both here and elsewhere. Those who are critical of these massive tax give-aways are often portrayed by TIDD proponents as unreasonable. But in fact, I can attest to a complete unwillingness to compromise on the part of the development community during negotiations with Councilor Cadigan to amend the City legislation last year. Their recalcitrance aside, there needs to be more oversight and accountability built into the legislation, at the very least.

And thats one thing HB 451 does at the state level. The truth is that as currently constructed, the state legislation allows a tremendous drain on the general fund, which is a major source of funding for social services and education
throughout the state. We can't afford to leave it the way it is, allowing up to 70% of GRT diversion with few controls in place on the back end.

Luckily, there are already a lot of Representatives who agree. I was surprised by how many signatures were scrawled on the Bill…at least 20 had signed right off the bat. I hope you all will call the committee members today, and in the coming
week as needed, and encourage the rest of our legislators to take a serious look and support this bill.

The members of the House Judiciary Committee are:

Rep. Al Park (D) Chair
Rep. Joseph Cervantes (D) Vice Chair
Rep. Elias Barela- SPONSOR (D) Member
Rep. Gail Chasey - Co-signer (D) Member
Rep. Daniel R. Foley (R) Member
Rep. Antonio "Moe" Maestas (D) Member
Rep. W. Ken Martinez (D) Member
Rep. William "Bill" R. Rehm (R) Member
Rep. Mimi Stewart (D) Member
Rep. Thomas E. Swisstack (D) Member
Rep. Gloria C. Vaughn (R) Member
Rep. Eric A. Youngberg (R) Member
Rep. Teresa A. Zanetti (R) Member

You can find their contact information here: http://legis.state.nm.us/lcs/legislatorsearch.asp.

ps You might think the title of this post only refers to TIDDs, but in fact, TIDDs are just one part of the massive New Mexico gravy train. A local expert told me the other day that almost 50% of our tax code is frittered away through tax credits, and he also said that once passed, a tax credit might as well be considered permanent because they are never revisited. Want some dough? Get yourself a tax credit!

Cross-Posted on m-pyre.blogspot.com

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Comment by bleve on January 30, 2008 at 9:18am: The article below gives a good background of how the TIDDS came to be and how the legislature was influenced by the development community in its implementation.

It also has some really good information on the Development Fees Act which bars local governments from enacting taxes on developers for school, library, community centers, etc infrastructure, which they are not required to use your tax payer money toward in the first place, hence the current school funding problem on the westside.

Thanks to Laura Paskus for the link and thank you Marjorie for staying on top of this very important subject.

DEVELOPING REAL INFLUENCE:
THE REAL ESTATE INDUSTRY AND THE NEW MEX...

Comment by shotsie on January 31, 2008 at 10:34am: Great articles, folks! Too bad the response from the DCF members isn't overwhelming.

There's good and bad points about TIDDS - the good point is that the existing tax base doesn't have to pay for a lot of infrastructure for new subdivisions, although schools and government buildings are a glaring omission that need to be addressed. Developers are able to undercut existing home prices by NOT paying the real costs of housing - if they had to chip in for local schools, et al, which cost real money, the cost per house would increase probably 10% or so. So that's one item that needs to be addressed.
The second item is controlling the cost and the quality of the infrastructure. The cost should be captured just like any bond issue - come up with a total dollar figure, look at the number of housing units paying this off in x number of years, then set up a payment schedule, and keep the numbers out in the open. Maybe cap the percentage that can be written off as taxes, so that out-of-scope work would be treated as an extra homeowner association fee, that is, not as a tax. I would want to see the taxbase revert back to the government once the bonds are paid off.
Quality is my main concern - government is here forever, and has a vested interest in providing a long lasting infrastructure - developers, even very large ones, come and go, and some do very shoddy work (with the appropriate pay-offs to inspectors). (I can remember the flood of 1983 in Tucson, which exposed the cheap, cheap roads and utility hookups that the shady developer of Continental Ranch put in. He was part of a major savings and loan scandal.) So, the question is, do these developers really put in high quality infrastructure, and maintain it? Or, who's liable for maintaining and correcting problems?
I guess the other objection is controlling growth and directions of these sub-divisions, but that's beyond my area of expertise, as it were....
Once again, great background from the two postings. Thanks.

Comment by bleve on January 31, 2008 at 11:15am: I tend to think legislating tax servitude to a developer is a big issue and I think you bring up some great questions. It would be interesting to look into SunCal's history of infrastructure... but I believe they subcontract locally, which offers the possibility of even more oversight.

This is a very important local issue and one which the community should not sleep on, if the way they fast tracked the recent westside TIDD is any indication. It worries me how these monster developments are proposed with virtually no mention of water resources down the line... at least not to my knowledge. Not to mention the obvious conflict of interests our legislators have in passing some of these tax incentives after receiving campaign contributions from the same interests.

I do wish more people were talking about it. Maybe we can highlight who's "hot" among the developers or throw in who's hooked up with each other... perhaps we could get a little more input if it was salacious. That approach seems to be all the rage.

Comment by Blakeington on February 1, 2008 at 4:46am: Good job, guys! I can't believe legislation can be manipulated like this. I've read what you've all said and it's highly informative, but I'm still wondering how "blighted neighborhoods" can be twisted to mean "greenfields." Did I miss something? Probably, and that's why I'm an arts and culture writer.