Gov. Hickenlooper doesn’t veto many bills, but he should do so with a bit of last day legislation that weakens a crucial public financing tool for redevelopment.
The Urban Redevelopment Fairness Act is unlikely to curtail abuses in so-called “tax increment financing” while punishing municipalities such as Vail and Avon for responsible efforts to improve our local economy.
Neither Vail nor Avon would have survived the recession as well as they did without the public infrastructural (just plain “infrastructure” seems less clunky) improvements that enabled redevelopment in Lionshead and around The Westin in Avon. The benefits have rippled out from there.
In essence, the mechanism known in shorthand as TIF freezes property tax revenue for government entities outside the redevelopment district and uses increases in property value from new development to help pay for the infrastructure upgrades needed to support the new development.
The concept is a little abstract for some critics, who mistakenly confuse the growth in property values after a project is completed for extra revenue they would have received if only there wasn’t that TIF district in place.
They don’t seem to realize that without the TIF, there wouldn’t be the redevelopment that led to sometimes dramatic gains in value, as is the case here. A “natural” increase in valuation would not be nearly as large as one aided by TIF, and often enough it would be less.
They also miss, particularly in cases such as Lionshead, the large increase in sales tax revenue that Vail’s success with the tool delivers, along with increases in property value outside the specific district — a direct result of the redevelopment inside it.
No TIF, no real-world revenue gains. County and school officials who think that they lost out on dollars generated in a successful TIF district are mistaken. They are counting at the wrong end of the process, basically.
Needlessly blunting, or rendering the TIF tool effectively unusable by responsible municipal officials to improve their communities is an awfully foolish bit of legislation in its current form. Especially as Colorado continues recovering from the Great Recession.
The governor would do our state a great favor by insisting that the Legislature put more thought into this next session. Redevelopment of our communities is too important to allow rash lawmaking to ruin.