OKLAHOMA CITY – Oklahoma voters would get the opportunity to say yes or no to new tax increment financing districts under a bill filed by a state lawmaker this year.
House Bill 1379 would require that a TIF district proposal be placed to a public vote before the TIF district could be approved. The measure, authored by state Rep. Tom Gann, R-Inola, would “eliminate the costly legal battle against government imposing a TIF district without the consent of the governed,” Gann said.
Gann said the idea was spawned by his concerns over a plan by the Mayes County Commission to develop a TIF district for the Mid-American Industrial Park.
He said the Mayes County commissioners appointed a review committee tasked with determining whether the proposal should proceed or not. The committee voted to form the TIF district, with one dissenting vote. County commissioners then voted 2-1, to affirm the decision.
“The process I personally observed was not one where balanced information was provided on whether a TIF district was a viable proposition for economic growth,” Gann said in a media statement announcing the bill. “I saw a process of one-sided information, using sales techniques to promote the proposal.”
A tax increment financing district is a public tool that reallocates newly generated tax dollars for up to 25 years to supporting development or redevelopment in certain areas, information on the Oklahoma Department of Commerce’s website notes.
“In Oklahoma, the terms and conditions for using TIF are provided in the Local Development Act, enacted by the state in 1992 and has been amended several times. Tax Increment Financing is used to help generate private development projects, through the funding by tax dollars, for public improvements and other eligible project costs,” the agency said.
The proposals have, at times, become controversial.
Chris Powell, former chairman of the Oklahoma Libertarian Party, called TIF districts “a public financing scheme that captures growth of tax revenue in a particular area to be used to subsidize developers.”
“In practice, what usually happens is that the TIF gets credit for growth that would have occurred anyway, albeit perhaps it would have occurred in a different location. In the meantime, increased tax revenue that occurs from inflation and from natural growth does not go to the government agencies that would otherwise receive it, such as schools, libraries, municipal and county governments,” Powell wrote in a web posting about TIF districts.
A report from the Oklahoma Department of Commerce indicates the state has at least 37 active TIF districts, including districts in Lawton, Elgin and Altus.
In Norman, a TIF district for the University North Park area was amended on a 5-4 vote by the Norman City Council to recapture tax revenue. City officials, concerned by a possible budget shortfall, passed a proposal that “authorized spending which returns the increment diversion and addresses the Budget situation,” wrote University of Oklahoma Economic Professor Cynthia Rogers.
“In the hopes of stopping the sales tax diversion, the City of Norman embarked on negotiations with the private partners, University Town Center, LLC and University of Oklahoma Foundation. At the same time the City of Norman passes a budget that assumed the tax diversion would end as of June 30, 2019,” Rogers wrote. “Residents are pushing back by trying to get a referendum on the ballot for citizens to vote on the new plan.”
Gann said his proposal would ensure public input on TIF districts.
State lawmakers will have their first chance to review Gann’s proposal this week, when the Oklahoma Legislature returns to the Capitol for the 2023 legislative session.