State report examines tax increment financing trends

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Minnesota State Auditor Rebecca Otto has released the Tax Increment Financing (TIF) Legislative Report.

The report summarizes the data received from the 1,886 unaudited TIF reports for the year ended December 31, 2010, and provides a summary of the violations cited in the limited-scope reviews concluded by the Office of the State Auditor in 2011. (No violations were cited in Douglas County or the city of Alexandria.)

This 16th annual Legislative Report was compiled from information received from the 430 municipalities and development authorities currently authorized to exercise TIF powers in Minnesota.

Highlights from the report include:

Current trends:

-- In calendar year 2010, development authorities returned $17,189,994

in tax increment revenue to the county auditor for redistribution to the

city, county, and school district as property taxes.

-- Thirty-nine TIF districts were certified in Minnesota during

calendar year 2010, while 147 TIF districts were decertified.

-- In 2010, 34 percent of the total number of TIF districts were

located in the Metro Area; 66 percent were located in Greater Minnesota.

However, 82 percent of the tax increment revenue generated in 2010 was

from districts located within the Metro Area.

-- In 2010, development authorities were given temporary expanded

authority under the Jobs Stimulus Program to use tax increment in ways

not previously authorized. As of the date of this Report, the OSA has

received TIF plans for 31 economic development districts created, and 35

spending plans have been submitted to the OSA under the Jobs Stimulus

Program.

Long-term trends:

-- The total number of TIF districts certified between 2006 and 2010

decreased by

57 percent.

-- During the five-year period between 2006 and 2010, the number of

economic development districts certified decreased by 57 percent. The

number of housing districts certified decreased by 67 percent. The

number of redevelopment districts certified decreased by 46 percent.

-- Over the 10-year period covering 2001 through 2010, the number of

districts certified decreased by 74 percent.

To view the complete report, which includes an executive summary,

tables, and graphs, go to:

http://www.auditor.state.mn.us/default.aspx?page=20120201.003

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