Guest MINDSETTERS™: Time to Bring Back Main Street
Saturday, March 10, 2012
Since the rise of suburban sprawl in the ’60s and ’70s, Americans have witnessed the slow death of Main Street. Here in Rhode Island, the closing of textile mills, many of which were located at town and city centers, further contributed to abandonment of downtown areas, adding their sprawling empty complexes to the shuttered storefronts of businesses their employees used to frequent.
The tide has turned, and the public has shown interest in returning vitality to their Main Streets, village centers and downtowns. People now recognize that in exchange for the convenience of one-stop shopping centers, highways and subdivisions, our communities have given up many of the elements that previously made them friendly and unique. Today, many more people appreciate the importance of shopping locally, and the fun, convenience and health benefits of having walkable, safe and worthwhile downtowns, with small businesses that employ locals.
Toward that end, we are sponsoring legislation (2012-H 7399, 2012-S 2462) to help municipalities create “growth centers,” typically a Main Street or downtown area where they can channel targeted investment and retain a portion of the tax revenue generated there to reinvest in capital and streetscape improvements.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTHere’s the way it works: With state approval, a municipality designates a growth center, and then sets aside a portion of the tax revenues generated in that area solely for investment in redevelopment projects within it. The proposal exempts those funds from being counted as part of the municipality’s tax levy for the purposes of the tax levy cap (sometimes called “3050” after the bill that put it in place). The funds cannot be used in any way except to fund infrastructure improvements within the district to encourage further development there, which, in turn, will generate more tax dollars.
There is already a similar program in place known as tax increment financing (TIF), but for TIF districts, municipalities issue bonds to pay for infrastructure improvements and the additional tax income generated is used to pay the debt service on those bonds. Under our plan, there are no bonds, and the additional tax income generated would instead be reinvested directly in more infrastructure development in a pay-as-you-go manner.
The idea is that by investing in infrastructure in downtowns, whether it’s something large like sewage line or street improvements, or something small like adding a bit of lighting or benches and planters, cities and towns can create conditions that make downtown areas more inviting to those who are looking to invest private money in locating their business, home or other development there. Most downtowns already have good “bones” – like existing roads, bridges, municipal services and sturdy buildings, but many need modernization and improvements to make them attractive to businesses, residents and people who will become visitors to the area. Unlike TIF districts, the money invested all goes directly to the improvements because there isn’t debt service to pay. Our efforts have the backing of Grow Smart Rhode Island, which fights sprawl and is leading the charge for better-managed growth through innovative policies and programs.
It should be noted that this effort is not meant as some way to perform an end-run around the tax levy cap, nor is it a veiled effort to raise taxes. It allows the city to exclude the increased tax revenue generated in the growth area from the state-mandated cap on the tax levy, the aggregate amount of all the taxes a city or town collects from all property taxpayers. (The cap isn’t on the tax rate, the dollars-per-thousand of value taxpayers are billed.) By exempting the growth from the limit, the town will have an accountable and sustainable way to invest in its economic future.
The public has supported previous efforts to invest in Main Streets and downtowns, most notably in the now-defunct but very successful historic tax credit program, which helped attract private investment and paved the way for significant redevelopment projects all over the state.
We believe the public will welcome this effort as well. It allows municipalities the flexibility to leverage private investment into revitalizing property, helping to bring life back to limping downtown areas and generating new tax dollars – from new investment, not overburdened residents -- to help support our struggling municipalities.
Rep. Jeremiah T. O’Grady is a Democrat who represents District 46 in Lincoln and Pawtucket. Sen. John J. Tassoni Jr. is a Democrat who represents District 22 in Smithfield and North Smithfield.
