LINCOLN, Neb. (KMTV) — Omaha has announced ambitious plans for a streetcar on Farnam Street, funding it through tax increment financing, known as TIF. It specifically uses a new law passed by the legislature and voters, which allows the project to hold off on paying increased property taxes for 20 years if the area is extremely blighted.
But an Omaha state senator is seeking possible changes to laws on tax increment financing that could affect the streetcar project.
“I'm all in favor of the streetcar but that wasn’t the intent,” said State Senator Justin Wayne.
He introduced an amendment Tuesday that would require cities to make a plan on what, specifically, 20-year TIF can be used. Wayne's examples include affordable housing and flood mitigation.
His ultimate goal is for developers to go to North Omaha and South Omaha rather than focus on parts of the city that are doing well economically.
“If the tools are the same, then why wouldn’t somebody go to 108th and Dodge and build up there vs north and south Omaha,” said Wayne.
Jennifer Taylor, assistant city attorney for the City of Omaha told the legislature that the city already has informal requirements for 20-year TIF. Those requirements include upgrades to public infrastructure and public transportation.
Taylor said the project wouldn’t happen, but for a streetcar.
“This is 100% public infrastructure project that would be funded with tax increment financing, excess tax revenues, that were generated by that project itself,” said Taylor.
Wayne again, says that’s not what the law is for.
“But for public transit, this project won’t go forward. That was never the intent of the original TIF or extremely blighted,” said Taylor.
It's unclear what the Urban Affairs Committee will do. Wayne, who chairs the committee, says he doesn’t want to leave Omaha without a streetcar and will look at different funding mechanisms, such as the new regional transit authority, to pay for it.
“What I’m trying to do now is come up with creative ways to make sure that the Omaha project continues to move but put some constraints on TIF to make sure it’s used appropriately,” said Wayne.
Nebraska’s original and frequently used TIF law only allows for 15 years to pass before an increase in property taxes for the property owner.
Wayne says the Urban Affairs Committee is looking at a variety of polarizing bills on TIF and says he's taking time to let people regroup before pushing a package of bills to the full legislature.
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