Albuquerque city councilors Monday night approved two tax increment financing (TIF) proposals for Downtown, but made some changes that Mayor Tim Keller’s administration says are “incredibly restrictive.”
After a lengthy discussion during their Monday meeting, councilors unanimously approved the tax increment financing measures which allow the Metropolitan Redevelopment Agency (MRA) to implement both property tax-based financing and gross receipts tax-based financing.
Tax increment financing is a method that uses a portion of either property or gross receipts taxes toward improvement projects in a certain area.
According to MRA Director Terry Brunner, as property taxes and gross receipts tax increase over time, the MRA would take 75% of that financial growth and reinvest it in Downtown over the course of 20 years.
The MRA can now move forward with the TIF initiatives but councilors made some changes they said would ensure more accountability.
The City Council amended the proposals to require a TIF oversight board and approval from the council for any project receiving $100,000 or more in TIF funds.
“I don’t know if that is something we want to do, it seems like this is incredibly restrictive,” Brunner said. “We don’t know, in any of our TIF districts, what revenue we’re bringing in, so it is really hard to set a baseline of where you want to be. I also want to emphasize, none of us are going to see any of this revenue until, at the earliest, probably 2027 and then it will build over time.”
Brunner said what “developers don’t like is a lot of paperwork and hurdles” that make it harder to complete a deal. He said other places that use TIF leave it as an open proposition and create rules periodically, and “limiting yourself is the opposite of what you want to try to do with TIF.”
Councilor Joaquín Baca, who sponsored the bills at the mayor’s office’s request, agreed with Brunner and said he would “hate to put any kind of restrictions on something that is just starting off.”
After hearing that the initiatives would not generate funds for a few years, Councilor Nichole Rogers said there should not be an issue with setting a limit and she is concerned about allowing the MRA to have a “blank check” that would not be approved by the council.
After the council’s decision, Brunner said in a statement that the administration is still optimistic the TIF initiatives will help Downtown, “but unfortunately, City Council added a lot of red tape and is trying to micromanage a process that is supposed to help commercial industry thrive.”
Read more about tax increment financing and Brunner answering criticism about it increasing taxes for business owners here.
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