Missoula officials weigh TIF regulations, possible impacts

MISSOULA, Mont. — City officials are considering putting some new regulations to TIF funding and its use by the Missoula Redevelopment Agency.

Tax increment financing is an important tool that helps fund projects in Missoula.

TIF funds have been used in Missoula for decades, but an NBC Montana report in 2019 uncovered TIF usage here often differs from standard applications.

University of Illinois at Chicago professor Dr. David Merriman, an expert in TIF funding, said Missoula’s usage of TIF dollars in projects like the First Interstate and Stockman bank buildings has been unusual.

One regulation being considered would allow the MRA to decide where remittance funds are coming from instead of coming out of their respective districts directly.

“Under the resolution, what it states is that the MRA gets to choose the areas where remittance would come from based off of a number of factors that are listed there,” Missoula Chief Administrative Officer Dale Bickell said.

Another part of the resolution would put a cap on the availability of TIF funds.

TIF funds for urban renewal districts could not exceed 9% of the city’s total taxable value. That could affect the development of future projects like the Riverfront Triangle and Scott Street housing project.

“The inclusion of these projects in does, in fact, create a limitation. They would cause us to go over the current proposed cap, and this is the amount it would be over the cap at 9 and 10%,” Bickell added.

Some experts warn the regulation could limit the city from hitting its development goals.

“Two things that hold our workforce back is the affordability of housing and child care. There is no question the issues you are all concerned about are the right issues to be concerned about,” Missoula Economic Partnership CEO Grant Kier said. “They are some of the biggest issues facing our economy, but they are some of the most difficult and complex to address and some of the most expensive. The TIF having a cap might be the thing that might make it harder to address them in creative ways rather than easier.”

Proponents of the regulations tell officials they think they could create more balance.

“They see the benefit of an appropriate balance here,” Bickell said after talking with advocates for the regulations.

City Council will meet with MRA board members next week to continue deliberation on future regulations.