Zawistowski Applauds Legislation Boosting Economic Development Finance Options

HARTFORD — Cities and towns looking for a way to finance economic development projects may have another option through legislation co-sponsored by Rep. Tami Zawistowski.

Zawistowski helped lead an effort to expand the application of Tax Incremental Financing (TIF) districts, a process by which an anticipated future increase in property tax revenue from a designated project is used to pay for a municipality’s investment in its development or redevelopment: Money would be borrowed for today’s project, then repaid over time with the increased tax revenue generated as the development drives increased property values.

A member of the Planning and Development Committee, Zawistowski helped shepherd the bill through its late-May legislative approval. Gov. Dannel Malloy signed the bill (S.B. 677) into law Monday.

“Ask leaders of any community and you’ll find that giving property taxpayers a bit of relief through growing the commercial tax base is near the top of their agenda,” said Zawistowski, who serves residents of Suffield, East Granby and part of Windsor. “Creating something like an office or light manufacturing park, for example, would have a very positive impact on a town’s finances. But for so many communities, funding such projects is a major hurdle. This provides them with an option which does not require these costs to be funded by their current base taxpayers. It’s our hope that this will give some municipalities they help they need.”

TIF districts can also be used for municipal infrastructure projects, which in some cases can lead to increased tax revenues in the areas they benefit.
Existing law allows cities and towns to use TIF to finance economic development projects but under far narrower conditions than those the bill establishes.

Economic development officials statewide testified in favor of the bill, contending the legislation’s push to streamline existing regulations would eliminate the headache of requiring approvals from multiple state entities when forming a district. Further, the narrow set of projects allowed under current law doesn’t always match the development or redevelopment goals of cities and towns.