I know what you’re thinking; oh, no, not another Katch article about the city’s dilemma over whether or not to recertify the 15 parcels containing 8560 properties that comprise the pre-1979 tax increment finance district. I have discussed this point to death with city staff, and have decided that we, the residents of Minneapolis, are asking the wrong question.
The question we should be asking is, are we going to want to fund Target Center refinancing and neighborhood revitalization at the same level as currently exists, or even higher in the future, in order to keep our commitment in line with inflation? Or are we going to spend less on these objectives? 
If we are not going to buy any of the services we are currently using the money for, then the answer is quite clear: we should not recertify. But if we are going to buy these services, and we let these districts remain in our city’s tax base at current market value, we will have to raise the property tax levy to a level greater than we are paying today.
In theory, we should have seen lower property taxes once the TIF districts decertified, but our leaders felt that our need for cash under the maximum levy was greater than our neighbor’s need for a tax break. To achieve a tax break, our council and mayor would need to reduce spending. With our current council this concept seems a bit too ambitious.
Ok, so let say we are going to refinance Target Center (because we are) and that we are going to need money for street lights, street resurfacing, and replacing our tree canopy. Wow, those are all functions of neighborhood revitalization. Proper use of those TIF districts could actually lower our taxes by eliminating our need for special assessment.
I know that’s not how NRP or NCEC is set up to run, but imagine that you replace the bricks and mortar requirement for spending these funds with street and sidewalk repair, street lights, and parkway maintenance. Perhaps I may be putting too much thought into this local issue, but the John Lennon song “Imagine” starts playing in my head when I consider all of the general fund projects that could be shifted to neighbor revitalization.
Reduced spending in the general fund might lead to an actual tax cut that could be maintained. So, why should we recertify the pre-1979 TIF district? I know that in our modern age we tend to have short attention spans, but one might recall a referendum on last year’s ballot increasing the levy for our public schools. That ballot initiative passed, increasing the levy going directly to our schools to an amount nearly equal to the amount of money that we contribute to Hennepin County. If we do not recertify the pre-1979 TIF districts, and we spend the same or more money on our neighborhoods and Target Center, our tax payers will have to pony up an additional $9,100,000 every year; the capture on this district excludes paying the Public Schools.
To be fair, the State Legislature agreed, in the statute that allowed us to recertify, to cover the public schools for us, so the act of not recertifying is in fact a masochistic endeavor. Roughly 32 cents of every dollar of tax base we levy goes to either the public schools or the State of Minnesota, so if we want to pay for Target Center and Neighborhoods by raising the general fund levy, this activity would result a far higher property tax payment.
I originally lobbied to save NRP with the caveat that we move the street lighting fee, special assessments for street, sidewalk and sewer improvement, and green canopy replacement and maintenance into the responsibility of our neighborhood organizations. Having witnessed Transportation and Public Works committee meetings where those who testified stated that it was going to be near impossible to bring our city streets back from being pathetic, I saw this project as greater need than adding more affordable housing to a market that is already saturated. Affordable housing has become a joke in Minneapolis, as it is now based on 80% of metro medium income or a salary of $64,000 per year. Against that measure almost all housing in Minneapolis is affordable.
Money wasted on bricks and mortar affordable housing would be better spent on section 8 and other housing subsidies that might actually help our less fortunate neighbors afford the housing already built. So, neighborhood bricks and mortar should provide basic maintenance to the existing infrastructure that our neighborhoods rely on.
Our City Council and Mayor have already found creative ways to spend neighborhood money that will not benefit neighborhoods. I am sorry, but translators and homelessness advocates, though good, and useful in a large city, are not neighborhood programs. When our neighbors on fixed incomes are being forced out of their homes due to higher and higher property taxes and special assessments for all sorts of work coming to whichever neighborhood you may live in, isn’t about time we use our resources to defray these expenses instead of business as usual?
If all we are going to do is misuse our TIF district captures, then I agree, let’s not recertify. But if we can save our neighbors from higher property taxes through recertification, then let’s recertify. The answer that our policy-makers are searching for is as easy as that.
