TBO.com - TBO is Tampa Bay Online

State Court's Muddy Ruling Jeopardizes Urban Revival Efforts

ADVERTISEMENT

The Tampa Tribune

Published: September 22, 2007

In issuing a ruling that reverses a 27-year precedent and strips local governments of a key funding source, you'd think the Florida Supreme Court would nail down the details.

Instead, the court's muddy decision has thrown local finances, construction plans and the redevelopment of blighted neighborhoods into jeopardy.

The court's sweeping ruling in an Escambia County case was not the court's finest hour. Fortunately, justices have agreed to hold another hearing next month so that city, county and school board officials can seek clarification and direction.

In its ruling, the court unanimously decided that local governments must seek voter approval before issuing debt backed by future tax dollars, a ruling that sounds solid. The lack of specifics is what's objectionable.

The decision targets tax increment financing, a funding stream used by local governments as collateral for revenue bonds that fund capital improvements. The fund exists only in blighted neighborhoods formally designated as Community Redevelopment Areas.

The concept is simple. If the neighborhood's property taxes increase - a likely outcome because of the CRA's targeted redevelopment efforts - the extra money goes back into the neighborhood to pay for new improvements or repay the bonds for existing improvements.

The tool is an effective and equitable way to bring vitality to decaying neighborhoods because investing in roads, drainage and other necessities can help attract businesses and jobs to an area, increasing property values and the taxes collected in the CRA.

Until now, elected local leaders have been able to approve the use of TIF funds, a level of review that enables public scrutiny. The city of Tampa has nine TIF-backed projects in the works, including the major revitalization efforts in Central Park, downtown and Tampa Heights.

The court was not clear on whether its ruling applies to projects already approved, though the opinion states that bonds validated prior to the ruling becoming final will not be affected.

Neither did it say whether the referendum should be limited to residents of the CRA neighborhood, or open to everyone in the city or county. Since the taxing tool captures dollars that otherwise would go into a city's general fund, it could be argued that the funding device affects all taxpayers, however remotely.

But mandating a countywide vote would allow suburban residents to determine the fate of urban neighborhoods and surely doom revitalization efforts.

It makes more sense to limit the vote to the neighborhood where the tax is collected, where the improvements will be made and where the residents will be most affected.

But even this poses a problem. The boundaries of a CRA are drawn without regard to voting precincts. So how do you manage the election?

The court is right to want to empower voters on local spending decisions, but it has much explaining to do. In giving further direction, it should not rob local governments of the ability to help impoverished neighborhoods.

Share this:

Loading Comments...

Email Print

ADVERTISEMENT