BIPPS: Reintroduce west end TIF enabling legislation in 2023
The West End Opportunity Partnership and its tax increment financing (TIF) program have been in the news recently.
Marcus Green from WDRB published a lengthy investigative piece on the wide range of questions and controversies surrounding the ambitious effort to revitalize Louisville’s west end neighborhoods.
Local media is reporting the Partnership has been successful in raising $10 million in private donations as required by the HB 321 — the TIF’s enabling legislation.
Green’s piece reported that the Bluegrass Institute has recommended that the General Assembly revisit the TIF in a future session. We provided a letter earlier this week to the West End Opportunity Partnership’s board explaining our recommendation.
First, there are several items that need to be “cleaned up” from the original bill:
The Board seat designated for a member of the Federal Reserve should be eliminated.
Greater clarity on the role of Louisville Metro Council and the use of “local participation agreements” is warranted.
There are a number of taxpayer-protection provisions that should be considered to avoid problems that plague the YUM Arena and Omni Hotel TIFs.
Second, HB 321 could be vulnerable to a court challenge under Bevin v. Beshear (2018), where the Kentucky Supreme Court declared a major pension reform unconstitutional due to a lack of the three required “readings” prior to passage.
Our letter described the path the General Assembly took to pass HB 321:
HB 321 - amended by House Committee Substitute 1 - passed out the House of Representatives as a 1-page bill directing the Kentucky Revenue Department to conform the 2020 state tax filing deadline with any changes to the 2020 federal filing deadline. HB 321 HCS1 as passed by the House received a first and second reading in the Senate in mid-March. On the final day of the session, the Senate amended HB 321 with Senate Committee Substitute 1 to include language nearly identical to HB 588 (the original west end TIF legislation), gave HB 321 SCS1 a reading, and passed it in the closing hour. The House concurred with HB 321 SCS1 that same night.
We offered in our letter, “if the General Assembly revisited the west end TIF’s authorizing statutes through a normal legislative process (i.e. committee hearings and votes, floor debate in both chambers and votes, sufficient readings in both chambers), a successful legal challenge to the constitutionality of HB 321 could be foreclosed.” Our letter continued, “The West End Opportunity Partnership would benefit from that certainty as it moves forward with the organization’s business and fundraising.”
The third reason we gave to re-introduce the legislation was to make up for the lack of transparency in 2021. We wrote, “the effort would have greatly benefited from engaging a broad cross-section of stakeholders from the beginning. The opportunity to do so remains.”
There's always an opportunity to develop consensus when people sit down and talk through ideas of how to move forward. We hope the Partnership’s board will take us up on our request to meet. And puts out an invitation to the many groups that have been left out of the process to join the meeting.