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Minnesota Legislature

Could TIF help fund streetcars?

Published (4/8/2010)
By Lee Ann Schutz
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Imagine streetcars as part of the mix of mass transit options in the Twin Cities metropolitan area. Rep. Frank Hornstein (DFL-Mpls) sponsors HF3218 that could help bring the lines back to the streets.

The bill would create a new type of tax increment financing district to help finance improvements and costs related to rail and bus rapid transit lines. It was held over April 7 by the House Taxes Committee for possible omnibus bill inclusion.

Although the change could be applied along a transit corridor anywhere in the state, Hornstein hopes the new TIF category would help bring the old transportation mode back to the streets of Minneapolis —specifically along the Lake Street Corridor and serve as a “critical connector” between the Hiawatha Line and the proposed Southwest rail line. It could also be a catalyst for development.

The concept has the support of the City of Minneapolis, and the Metropolitan Council has indicated its willingness to collaborate on the project.

TIF is an economic development tool that is not without its critics, including Rep. Ann Lenczewski (DFL-Bloomington), chairwoman of the committee. “We have a lot of TIF districts in the state, and this would obviously create a whole bunch more, and a whole bunch more property taxes that are not transparent. It’s not about this TIF bill, but every TIF bill.” She cautioned that, while many TIF bills before the committee are limited in scope, this one would apply across the state and needs careful consideration.

To qualify, the new TIF-designated area would need to be within one-half mile of a qualifying transit line, such as light rail, commuter, bus rapid transit or streetcar.

Rep. Roger Reinert (DFL-Duluth) suggested that passenger railroad lines also be included.

Peter Wagenius, policy director for the City of Minneapolis, said that at least four cities in other states have received federal funding for streetcar projects, and that Minnesota could be in line to see funds. “There is nothing superior about their projects,” he said. “We just are not yet in the position to compete. They took the streetcar concept earlier; they identified local funding streams for the match.”

A companion, SF2919, sponsored by Sen. D. Scott Dibble (DFL-Mpls), awaits action by the Senate Finance Committee.

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