EDITORIAL: TIF districts are valuable tool for cities

We were glad to see opposition out in force to House Bill 359, which would needlessly cripple city governments that use tax-increment finance districts as a means of funding renewal and redevelopment projects.

Kalispell City Manager Doug Russell was among the two dozen opponents who arrived in Helena to testify against HB-359. He came armed with Kalispell’s considerable success using TIF districts to promote projects that have kept the city’s downtown and core areas strong over the past three decades.

The idea of a tax-increment district is that revenue from increases in taxable value will be isolated into a fund that benefits specific projects in the district such as urban renewal.

The bill’s sponsor, Rep. Tom Burnett, R-Bozeman, began with a premise that because the district’s additional revenue is lost to the city for current expenses, that other taxpayers are making up the difference.

Russell argued against that position, especially in the long term.

“What happens with tax-increment financing,” he said, “is urban renewal creates value that eventually goes back to all those taxing jurisdictions.”

We’ve seen major growth in Kalispell from several TIF districts, including the one in South Kalispell surrounding the airport and the West Side district that has helped to keep that area economically healthy during tough times.

Yes, there is a short-term hit that some taxing entities such as school districts may have to account for, but in the long run, they along with the city’s residents benefit from the new development they attract. Montana muncipalities have few enough tools available to promote development. They should not see this one restricted to the point of becoming irrelevant.

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