By: Brent Willett & Dan Culhane
In 2012, the Iowa Legislature adopted new tax increment financing reporting standards for Iowa cities and counties following weeks of intense debate about the future of the tool. The legislation has created significant new documentation requirements for local governments which have taken effect this year. The Professional Developers of Iowa and the Iowa Chamber Alliance both supported the new reporting requirements not because we believe local government disclosure relative to TIF was previously inadequate, but because in order to preserve this critical tool for economic development in our communities, we believe shining more light on the administration of TIF will only further strengthen the value narrative we seek to advance at every opportunity with policy-makers.
The new reporting standards have created additional workloads for municipal staffs already stretched in many cases, creating understandable urgency to meet the new minimum reporting demands and progress on to other business. With this in mind, we want to emphasize how important one particular component of the new reporting framework is. The TIF reporting system contains an optional 255-character text box which allows cities to describe the impact of reported-upon TIF projects in their communities. That you're provided only 255 characters- less than two tweets' worth- to make this impact description is unfortunate, but it makes it no less important.
TIF data will be gathered from this system- along with optional comments- to inform the first report to the Legislature to come from the new system in December. We are all intimately familiar with the outsized role that anecdotal information plays in policy debates, and we feel strongly that information shared in the optional comments section will prove invaluable to future legislative discussions about the importance of TIF to economic development in Iowa.
Take, for example, the recent use of TIF to secure the $150 million, 89-job Valent BioSciences Corporation project to MitchellCounty in North Central Iowa last year. The required portions of the new TIF reporting system will capture the fact that $12 million in TIF debt was issued by MitchellCounty and the City of Osage for two necessary wastewater treatment facility projects to support the attraction of the business. Indeed, it will capture the fact that the debt has a 20-year schedule, and it will even capture that 89 new jobs are anticipated to result from the project. What it won't capture is the fact that without the ability to utilize TIF to upgrade the City of Osage's wastewater treatment capabilities and to install on-site treatment capabilities at the project site, the project could not have gone forward. The standard reporting will not capture the fact that the Valent project is a critical game-changer for the region, made possible only through the availability of TIF. It will not capture the fact that hundreds of temporary construction and other project jobs resulted in this rural area as a result of the project.
At some point this session, our organizations' lobbyists will likely be standing shoulder to shoulder with yours battling again to defend TIF, while the grassroots from our 3 organizations try to support the effort by generating phone calls and emails to the Capitol. The information you each submit in that 255-character text box could be the game-changing element that helps us make the argument that ends up saving TIF.
Brent Willett is President of the Professional Developers of Iowa
Dan Culhane is President of the Iowa Chamber Alliance