SB 83 – Use of TIF Funds for Infrastructure Maintenance

Sen. Melton has introduced SB 83 which would allow redevelopment commissions to use up to 15% of the tax proceeds received by a tax increment financing allocation area in a given year for maintaining and repairing roads, sewers, and other public infrastructure. At a very general level, I think the idea is to use TIF revenues for capital expenses rather than operating expenses. So, this would be a departure in that repair and maintenance are expenses you’d expect general tax revenues to take care of. But, of course, one of the knocks on tax increment financing is the idea that it captures taxes that would otherwise be available for repair and maintenance. (The counterargument is that those tax dollars wouldn’t be available in the first place without TIF projects spurring economic development). There’s an argument to be made that this change is consistent with the overall TIF philosophy if economic activity is making additional demands on roads and public infrastructure. Nobody wants to invest in an area with inadequate sewage services and crumbling roads.