Legislative Ltrs MVM - TIF TaxeCity Manager's Office
50 West 13th Street
Dubuque, Iowa 520014864
(319) 5894110
(319) 5894149 FAX
March 28, 2002
VIA E-MAIL &
1ST CLASS MAIL
mike_connolly@legis.state.ia.us
The Honorable Mike Connolly
Iowa State Senator
3458 Daniels
Dubuque, IA 52001
CO
Dear Senator Connolly:
The Dubuque Democratic Platform includes a Tax Increment Financing Resolution
recommending the following: a) creation of a TIF Disclosure File for each TIF (in
addition to the current annual reporting requirements); b) limiting the combination or
expansion of a TIF district without giving up the existing increment in the district; c)
requiring the approval of the school boards and board of supervisors; and d) limiting the
recovery period of TIF debt to 10 years without a county wide referendum.
The adoption of this type of legislation would have a severe impact on the city's ability to
use tax increment financing as an effective economic development tool.
The reasoning presented for the TIF Platform Resolution is that local taxpayers suffer
as a resull of the loss of property tax dollars to local taxing entities and county tax
dollars are diverted to TIF districts from local governments in Dubuque County.
believe the authors of this resolution have incorrect information regarding the
mechanics and purpose of tax increment financing.
Tax Increment Financing was designed to clear up slum and blight and create jobs.
The most important principle to recognize is that TIF is used as an incentive for projects
that would not have happened without this important financing tool. When you use TIF,
the existing base level assessed valuation continues to generate taxes for the city,
schools and county. Only taxes from the newly created incremental value are captured
for use as a financial incentive or are used to do public improvements associated with a
project. This new incremental assessed value would not exist if incentives were not
used to attract new development and/or redevelopment.
Eervice People Integrity Responsibility Innovation Teamwork
Senator Mike Connolly
March 28, 2002
Page 2
In TIF districts that are created for economic development purposes, the new
incremental value is captured for a fixed number of years, and then that incremental
value starts flowing to the taxing bodies. The City of Dubuque has already closed out
two such TIF districts, allowing taxes from those increments to flow back to the taxing
bodies.
TIF districts created for removal of slum and blight often have a longer time line due to
the types of obstacles and amount of public improvements required to have successful
and sustainable development. The City of Dubuque has two such TIF districts wit the
largest of these districts being the downtown. The Dubuque City Council adopted a
policy many years ago restricting the amount of TIF revenues they would drawn down
from the district to 75% of the total revenue generated by the increment. Each year,
25% of the taxes generated by the downtown Tax Increment District are allowed to flow
back to the taxing bodies.
For the backers of this resolution to comment about tax dollars being "diverted" is to
totally ignore the history of valuation growth in the City. Total community assessed
valuation has increased 55% over the last ten years, to $1.5 billion. Much of this
valuation is the direct result of projects that were assisted with TIF financing. The
creation of all this new value, among other things, has allowed the City of Dubuque to
avoid a property tax increase for the average homeowner for the last eight years, with
six of those years seeing a property tax decrease, including this year's 5% reduction.
The City of Dubuque's portion of the property tax bill is the second lowest rate of the
nine largest cities in Iowa.
In closing I would remind you that Tax Increment Financing is an important tool that is
needed in its current form to insure Iowa corem unities continue to grow and successfully
compete for high paying, quality jobs. I again urge you to resist any efforts to further
erode the use of TIF in the State of Iowa.
Sincerely,
Michael C. Van Milligen
City Manager
MCVM:pj
cc: Mayor Terry Duggan
Dubuque City Council
Tom Bredeweg, Executive Director, Iowa League of Cities
Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Pauline Joyce, Administrative Services Manager
The Honorable Mike Con molly
Iowa State Senator
3458 Daniels
Dubuque, IA 52001
The Honorable Thomas Flynn
Iowa State Senator
21367 Girl Scout Road
Epworth, IA 52045
The Honorable Pam Jochum
Iowa State Representative
2368 Jackson
Dubuque. IA 52001
The Honorable Pat Murphy
Iowa State Representative
155 N. Grandview Avenue
Dubuque, rA 52001
The Honorable Robert Osterhaus
Iowa State Representative
216 Austin
Maquoketa, IA 52060
The Honorable Paul Scherrman
Iowa State Representative
P.O. Box 309
Farley, IA 52046
City Ma~ger's Office
50 West 13th Street
Dubuque, Iowa 52001-4864
(319) 559-4110
(319) 589-4149 FAX
Via E-Mail &
Ist Class Mail
mike_connolly@legis.state.ia.us
The Honorable Mike Connolly
Iowa State Senator
3458 Daniels
Dubuque, IA 52001
April 8, 2002
Dear Senator Connolly:
I understand that the omnibus appropriations bill, Senate File 2326, may be amended to
include the transfer of $60 million of RUTF allocations to the general fund. This bill is
scheduled to be debated in the House next week. I would urge you to vote "no" on any
amendment that shift road use tax funds to the general fund.
The shift of $60 million that has been proposed would reduce our revenues by
approximately 7 percent or $310,000. This would be on top of the reductions all cities
have already realized over the past year and would have a significant impact on our
ability to maintain our local street system.
Your assistance in preventing any further reduction in road use tax funds to cities is
greatly appreciated.
Sincerely,
Michael C. Van Milligen
City Manager
MCVM:pj
cc: Mayor Terry Duggan
Dubuque City Council
Tom Bredeweg, Executive Director, Iowa League of Cities
Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Service People Integrity Responsibility Innovation Teamwork
Tjqe Honorable Mike Connolly
Iowa State Senator
3458 Daniels
Dubuque, IA 52001
The Honorable Pam Jochum
Iowa State Representative
2368 Jackson
Dubuque, lA 52001
The Honorable Robert Osterhaus
Iowa State Representative
_~16 Austin
Maquoketa, IA 52060
The Honorable Thomas Flynn
Iowa State Senator
21367 Girl Scout Road
Epworth, IA 52045
The Honorable Pat Murphy
Iowa State Representative
155 N. Grandview Avenue
Dubuque, IA 52001
The Honorable Paul Scherrman
Iowa State Representative
P.O. Box 309
Farley, IA 52046