Monday, March 23, 2009

SunCal TIDDs Bill Fails

After passing the Senate, the SunCal TIDDs bill stalled in the House 33-33, save the taxpayers 408 million dollars. Here is a great comment from this blog:

Anonymous said...
Corporate Welfare,
shame on Linda Lopez and Sen. Bernadette sanchez for proposing this during these difficult finacial times. 4000 acre development. this works out to over $100,000 per acre. ARE YOU KIDDING. GIVE THIS MONEY TO THE PEOPLE. What happened to the ethics reform bill, oops , they must have been too busy working on how to sneak this by us common folks!

March 22, 2009 12:00 AM

More TIDDs Info You Won't Find in the J

Another Response to my TIDDs story with comments(**) from a TIDDs expert:

SunCal will get the TIDD money whether they provide a single job or
not.  There is nothing in the state law which requires that they
actually come through on their promises.
 
**The bonds can't be sold until there is sufficient GRT and property tax revenues generated within the TIDD to back the bonds ........ so SunCal doesn't have to create new jobs, but if they don't bring in jobs there will be no GRT......and no bonds.


That makes the TIDDs a pure giveaway - money for nothing.  It ought
to be illegal.  If they were contracts, they would have people going to
jail, even in New Mexico.
 
**I don't agree with this statement, but I understand what motivates the sentiment.

Once the Bonding is approved, it cannot be disapproved in the
future.  Once and over - it's a done deal.
 
**I'm researching this point ..... everyone I have spoken with concurs with this statement.  It concerns me very much.

TIDDs are funding for infrastructure - roads, sidewalks, parks,
flood control, stuff like that.  Nothing to do with jobs - nothing. 
But the money is a direct subsidy to the developer - it significantly
cuts his cost of doing business, so his profits go up by that amount. 
Wonder why SunCal is will ing to pay hundreds of thousands of dollars
to get the TIDD passed?  They will make hundreds of millions in pure
profit when the funds roll in.
 
**TIDDs are pure profit for SunCal .... I agree.  Normally, the developer is required to construct the roads, sewer, and water, etc. with his own $$.  In the case of TIDDs, he still must use his own $$ upfront, but then he is repaid in the future when the TIDD bonds are issued.  So it cushions his bottom line --- his profit.  It also shifts the risk from the private sector to the public sector.

They say they don't get paid until they do what they promise.  In
real life, that means they promise to build a road and some flood
control, and they get paid for it.  Bringing jobs is NOT in that
equation.  It's all about infrastructure.

**This is true to a point.  If there are no jobs ....there is no GRT.  If there is no GRT (and property tax), there will be no bonds.   So he must generate jobs.  The real issue ... will he simply entice existing jobs away from another part of the city or state to his development.   I think the cannibalization issue a serious one.  

If TIDDs bring jobs from outside the state, why did the State
provide incentives of $132M to Schott Solar and $47M to Fidelity to
move into Mesa del Sol?  MdS has huge TIDDs - no pun intended - why
didn't their magic suffice to bring in those outfits?  In fact, what
effect did their TIDDs have, at all, in bringing these companies to
town?

Giving up the taxes doesn't matter?  The development will be built
out in a few years, but for at least 30 years, the City and/or County
must provide ALL of the services, operations, maintenance, and anything
else that a big development like that would require.  But they have to
do it with only their remaining part of the Tax revenue - 25% to 50%. 
They can't do it.  Somehow current planning seems to ignore this point,
but it's very real - there is going to be a real awakening when things
start to get built.

Or, if it turns out that this portion of the tax revenues is enough
- then taxes should be cut big time!  You just can't win.

Journal Misses TIDDs Import

The good news is that the TIDDS bill has been temporarily pulled from the house due to rising public outcry. Of course, the Journal softpedaled this story. The bad news is that TIDDs will be back! It's a complex issue, so I have assembled more information.

Now is the time to email your legislators to prevent 400 million of your tax dollars being given to a CA company that already has many documented bankrupt developments. Here are some talking points (from a legislator) and a list of House email addresses.

Our local guy is Moe Maestas who is pro TIDDS (and, according to today's paper, sponsoring a bill to wipe away criminals' past crimes, making more business for criminal attorneys. Guess what he does for a living?)

From a legislator:

• TIDDs are a giveaway to the Developers.  They fund roads and sidewalks, and only increase the developer's profits.  They have nothing whatever to do with bringing jobs into the state.
• TIDDs take away the tax base the Cities and Counties need to provide services to the new developments, and take State funds needed for Capital Outlay, Education, and Aid to Children.
• TIDDs take tax revenues to benefit large developers at the expense of the whole state.
• If you approve these big TIDDs, you guarantee the developers hundreds of millions of dollars in subsidy, but the state law requires absolutely nothing in return from the developers.  They plan jobs, they promise jobs, but if they don't produce any, there is NO PENALTY.  You should not DARE to vote yes for these giveaways.
• TIDD funding encourages new, sprawling developments.  These developments will cannibalize jobs and business from other places in the area and the region.  This means TIDD subsidies are helping create rich new areas at the expense of existing areas.  The state should not, ever, subsidize this activity.
• If TIDDs have power to bring new jobs to NM, why did the State have to put in $130M to bring Schott Solar and $47M to bring Fidelity Investments to Mesa del Sol, which already has a huge TIDD?  Wasn't the "Job Magic" of their TIDD enough to bring in these companies?  Just what DID their TIDD contribute to bringing these businesses here?

Friday, March 13, 2009

Journal Fails to cover Ethics Commission

New Mexico needs legislative ethics reform, but especially an Ethics Commission. Such a bill is proposed, but Senators like Bernadette Sanchez oppose it.

Below you will find a great oped from the Albuquerque Chamber of Commerce and Common Cause, published yesterday in the Albuquerque Journal, WHICH SHOULD BE RUNNING STORIES LIKE THIS ON ITS FRONT PAGE.

Ever wonder why we have an unending series of public officials stealing our money? Can you say Manny Aragon? Forty other states have independent ethics commissions which investigate and deter corruption and crime.

Little known fact: New Mexico has just such a commission that investigates, disciplines and, even, fires judges. The Judicial Standards Commission operates independently, competently, professionally and without bias, taking down judges that are drunks, drug abusers, corrupt and/or perverts -- all recent cases.

Ask yourself, why don't legislators want an independent group looking for corruption??

So, you might want to phone your legislator about establishing an Ethics commission and the other reforms listed in the following oped from the Albuquerque Chamber of Commerce and Common Cause, published yesterday in the Albuquerque Journal, which should be running articles like this on the front page.

Ethics Reform Bogs Down

By Don Chalmers And Jack Taylor
Ethics Reform Advocates
      New Mexicans are asking the Legislature for meaningful ethics reform this year, and we couldn't agree more. Apparently, a number of lawmakers are also in agreement, given that they have introduced more than 45 bills related to campaign contribution limits, establishment of an ethics commission, limitations on state contractors' contributions to public officials, fiscal penalties for public officials who have committed crimes related to their office and imposition of state conduct legislation on local governments.
       However, we are running out of time to get this done. The Senate Rules Committee, which is the first committee of several in the Senate to which the ethics bills go, has spent the last three weeks reviewing the various ethics bills sponsored by senators in an effort to allow each legislator the opportunity to have a hearing on his or her bill.
       To date, several bills have passed out of this committee, one of which has made it out of the Senate and over to the House. That bill would allow the imposition of financial penalties on those public officials who commit a felony related to their office.
       The House has also been working on some ethics reform bills. It sent a whistle blower bill, an open conference committee bill and a bill to allow the Attorney General to prosecute statewide elected officials over to the Senate. It also has a bill to establish an ethics commission in its third committee.
       Yet, we still don't have a single piece of major ethics reform legislation moving through the process fast enough to be considered by both chambers and be sent up to the governor.
       As in years past, the major bills are stalled in committee. We know that legislators have a great deal on their plate, but many of these bills were introduced early in the session. They should be heard in committee and moved forward now; otherwise, we will, once again, fail to enact major, meaningful ethics reform.
       Perhaps it would help if all of us, legislators included, remember that:
       n New Mexico is one of five states in the country with no campaign contribution limits.
       n We're one of 10 states with no independent ethics commission to investigate allegations of misconduct by public officials.
       n We're one of just a handful of states in which the public is not allowed to observe legislative conference committees, the powerful committees that reconcile differences between bills that pass both chambers.
       n New Mexico is one of just six states that until recently didn't broadcast any of its legislative proceedings. (That's changed a bit this session, largely due to a bit of high-profile civil disobedience by Republican representative Janice Arnold-Jones.)
       n In reports published by the UCLA School of Law and the California Voter Foundation that analyzed states' campaign finance disclosure systems, New Mexico has received two consecutive “F” grades.
       We don't want to remain at the bottom of another list—if our state is ever to move up the economic and social ladder, the first step needs to be cleaning up the rules of the game in our state government.
       Legislators need to do the right thing and take action quickly on ethics reform. This is what their constituents want. This is what the New Mexico business community wants. This is what government reform advocates want. We believe this is probably what most legislators themselves want.
       Don Chalmers is board chairman of the Greater Albuquerque Chamber of Commerce. Jack Taylor is chairman of Common Cause of New Mexico.

Journal Covers TIDDs (sort of)

Tax Increment Development Districts are becoming ever more common in the U.S. and New Mexico despite being a disaster in cities like St. Louis and Chicago.

During the last week, after several years of supporting TIDDs, the Albuquerque Journal has at last devoted more coverage to both sides of this issue with two front page articles.

If Bernadette Sanchez, Linda Lopez, Moe Maestas and other legislators have their way, over the next few decades, hundreds of millions of NM tax dollars are going to go to a corporation (SunCal) whose main claim to fame is dozens of bankrupt developments in CA.

SunCal says it is going to bring jobs to Albuquerque. There is absolutely no proof of this, but they keep saying it, even though the record shows that SunCal's TIDDs will probably just cause jobs to move to their area from other areas of the city, which is a double tax loss for taxpayers.

There is, however, proof of one thing, a massive spending campaign with unprecedented amounts of money going to legislators and lobbyists.

Following is the article from today's Albuquerque Journal:

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Executive Director, 1993 -2005
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Thursday, March 12, 2009

TIDD Analysis Leaves Out Concerns

By Jeff Jones
Journal Staff Writer
       Critics of a plan to give $408 million in future tax money to a California-based developer are questioning why a state analysis provided to lawmakers omitted major concerns about the deal that were described in a similar document last year.
    A 2008 legislative analysis of a so-called TIDD deal for SunCal Cos. said the firm's planned development on Albuquerque's West Side might not generate nearly as much tax revenue as SunCal claimed.
    Last year's analysis also said that according to one of SunCal's own studies, most of the demand for industrial space in the giant new development would come from firms already doing business in the Albuquerque area rather than new, out-of-state firms — a top concern of critics who warn the tax break amounts to "cannibalism."
    The issue could have a "potentially huge impact for the state," the 2008 analysis said.
    Neither of those criticisms was detailed in this year's Legislative Finance Committee analysis given to lawmakers considering the controversial deal, which was approved by the Senate in late February and is pending in the House.
    "I absolutely think it (this year's analysis) does not tell the whole story," said Sen. Eric Griego, D-Albuquerque, a TIDD critic who questioned whether the LFC was pressured on the new analysis.
    LFC director David Abbey told the Journal on Tuesday that he was indeed pressured on the TIDD issue.
    He declined to say who applied pressure and insisted it had no impact.
    "We absolutely didn't bow to pressure," Abbey said. "We prize our objectivity."
    While he defended the objectivity of both the 2008 and 2009 analyses, he said this year's report should have detailed the cannibalism concern. And the LFC analysis was amended for lawmakers Wednesday morning after the Journal's inquiry.
    Since a SunCal TIDD bill died in the Roundhouse last year, the developer has embarked on a major push to get a similar measure through this year's Legislature.
    SunCal has spent a chunk of cash — it refuses to say how much — on pro-TIDD billboards, advertising and mailers. It also has a team of 11 top lobbyists and has spread more than $50,000 in campaign cash among dozens of Democratic and Republican lawmakers and the state Democratic Party.
    TIDDs, shorthand for tax increment development districts, involve the formation of special tax districts in which portions of the gross receipts and property taxes are set aside to pay the developer for infrastructure such as roads and water and sewer systems. The TIDDs issue bonds secured by the tax money.
    Backers of TIDDs say developers get none of the future tax money until they build their projects and say they benefit the state because they bring new jobs and tax revenue.
    Opponents equate them to a tax giveaway. And some maintain that much of the business locating in the SunCal TIDD would be existing Albuquerque-area companies enticed to relocate or expand there by lower rent or construction costs made possible by the TIDD tax subsidy.
    Cannibalism concerns stem from the possibility of existing companies moving to a TIDD-subsidized development, shifting some of the existing tax revenue from local government to the TIDD.
    The LFC's 2008 analysis, prepared by agency chief economist Norton Francis, said a study done for SunCal assumed most of the industrial growth would be from "intramarket" demand.
    "This is activity that would have generated revenue for the state that is moving to an area where half of the revenue is redistributed to the development, a potentially huge impact for the state," Francis wrote.
    The analysis added that according to a separate state study, the amount of permanent gross receipts tax revenue generated in several of the areas in the TIDD "will be less than 20 percent of the amount calculated by the (SunCal) study."
    The shorter, 2009 analysis that did not detail the concerns was done by another LFC staffer.
    SunCal chief spokesman David Soyka in written responses to Journal questions said the study done for his firm was" clearly based only upon historical averages" concerning typical Albuquerque growth and does not address SunCal's emphasis on recruiting firms from other states and countries.
    "TIDDs will allow us to attract large out-of-state companies to New Mexico by providing infrastructure and shovel-ready industrial land," Soyka wrote. "We have met with more than 30 international companies in our recruitment efforts to date."