Auditor's report examines tax increment financing
State Auditor Rebecca Otto released the 2008 Tax Increment Financing (TIF) Legislative Report this week. Tax increment financing is a tool created by the Minnesota Legislature to promote...
State Auditor Rebecca Otto released the 2008 Tax Increment Financing (TIF) Legislative Report this week. Tax increment financing is a tool created by the Minnesota Legislature to promote
economic development, redevelopment, and housing development in areas where it would not otherwise occur.
This 14th annual report was compiled from information received from the 443 municipalities and development authorities currently authorized to exercise TIF powers in Minnesota. It summarizes the data received from approximately 2,048 unaudited TIF reports for the year ended December 31, 2008, and provides a summary of the violations cited in the limited-scope audits concluded by the Office of the State Auditor in 2009.
Highlights from the report include:
-- A total of $10,971,913 in tax increment revenues was returned to
county auditors for redistribution as property taxes in calendar year
-- Eighty-seven TIF districts were certified in Minnesota during
calendar year 2008, while 115 TIF districts were decertified.
-- In 2008, 33% of the TIF districts were located in the Metro Area;
67% were located in Greater Minnesota. However, 82% of the tax increment
generated in 2008 was from districts located within the Metro Area.
-- In 2008, 70% of the TIF districts in the state were located in
third- and fourth-class cities.
-- When examining trends over the five-year period between 2004 and
2008, the number of economic development districts increased, while the
number of housing districts declined. Over the same period,
redevelopment districts showed no consistent trend.
-- The total number of districts certified dropped sharply from 2001 to
2002 and, after a slight increase in 2003, the number of districts
certified has continued to decrease.
-- Over the 10-year period covering 1998 through 2008, the number of
districts certified has declined approximately 42%.
To view the complete report, which includes an Executive Summary,
tables, and graphs, go to: