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SOCUrtiEerce>Print>How the TIE program worked, and how we reported it Finance & Commerce http://finance-commerce.com How the TIF program worked, and how we reported it by Chris Newmarker Published: October 24th, 2012 Tax increment financing districts allow local governments to help pay for development of blighted .;: areas by pledging to set aside the additional property ` z tax revenue created by a development, using it to facilitate pollution clean-up, infrastructure improvements or other activities a developer may ',' have been hesitant to fund. � The DFL-controlled state Legislature and then-Gov. . v rl ' i I Tim Pawlenty opted in 2010 to remove many of the = >g f strings attached so that local governments could spend excess dollars from the TIF districts on private "' `�" development projects. The program expired this year, with construction having to start by July 1. The 2010 law offered other measures, including the temporary creation of TIF economic development districts, a state historic structure tax credit and an angel investment tax credit. But Finance & Commerce decided to focus on the excess TIF spending because its effects are more immediate. Legislative staff requested that the Office of the State Auditor collect local spending plans, but the resulting report was short on details because of the lack of reporting requirements in the law. Reporting requirements are important but direction comes from the Legislature, said Minnesota State Auditor Rebecca Otto said in an email. "...The Legislature sets the policy, and the statute for the Jobs Stimulus Program for TIF does not require development authorities to report the number of jobs retained/created in order to use TIF funds in this way," she said. "The statute required a 'spending plan.' " Finance &Commerce reporter Chris Newmarker contacted the 35 cities and other public entities in the auditor's report and found that all but one, Montrose, spent, granted or lent money. (Montrose did not get money awarded in time.) In the process of his reporting, Newmarker discovered that St. Cloud also used TIF money. Newmarker collected details including jobs estimates (during construction and permanent jobs created or retained), total project costs, the form and amount of the award, square footage and general contractors. MORE ARTICLES ON THIS INVESTIGATION: The great property tax free-for-all Counting construction jobs proves difficult With loans to developers, all was usually forgiven Local officials have mixed views about lobs program CHART: Tracking construction and permanent jobs CHART: Following the money Cornplete URL: http://finance-commerce.com/2012/10/how-the-tif-program-worked-and-how-we-reported- it/ finance-commerce.com/wp-content/plugins/tdc-s oc iable-toolbar/wp-print.php?p=52335 1/2