The next step in the attempt by the city of Minneapolis to take TIF funds reserved for neighborhood programs and apply them to the general tax base has cleared the Ways & Means/Budget Committee and is headed for City Council approval on Friday, February 11.
Responding to a staff directive passed in December attached to the City’s 2011 budget, the Finance Department provided a report to the Committee this week with 3 options concerning the Consolidated TIF District funds. The option chosen would retain the boundaries of the TIF District, which was approved by State legislation at the City’s request in 2008, but would retain only 50% of the captured net tax capacity of the TIF District in 2012 and 2013; the remaining 50% of TIF revenue would be added to the City’s general tax base for property tax relief purposes.
The Consolidated TIF District was established to finance Target Center debt relief and neighborhood revitalization purposes from 2011 through 2020. The revenue expected during 2012 – 2013 is $10 million per year. If the action is approved by City Council, $5 million per year of the “retained” TIF funds would finance Target Center debt service, and no TIF funds would be used to fund the new Neighborhood Community Relations (NCR) Department. The City plans instead to fund the NCR with Neighborhood Revitalization Program (NRP) Phase II funds that were frozen by the 2011 budget staff directive. The City will need state legislative approval for changes related to re-purposing these NRP funds and for changes relating to TIF District revenue.