The focus of Iowa politicians this legislative session has been economic development. The Farm Bureau has introduced a concept that is causing both sides of the aisle to sit up and take notice.

The plan, called Stir Iowa, calls for eliminating tax increment financing for communities across the state. Tax increment financing (TIF) allows a city to freeze the value of a parcel of land, creating a base.

The land with its value frozen is called a TIF district. Once land is designated a TIF district it is then ready for development. The incremental taxes that would have been collected from the land are retained by the city to pay for the infrastructure of the proposed development.

Ames Mayor Ted Tedesco said he does not support the Farm Bureau’s concept to do away with TIF districts.

“Stir Iowa wants to take 4.5 percent of assessed valuation multiplied by each community’s tax levy and have them pay that to the state, even communities that don’t have TIFs,” he said.

It would be the first time the state would take money from local communities, Tedesco said.

The bureau’s plan would help to equalize school financing in the state, save $280 million in state school aid and provide $410 million in property tax relief during the next 20 years, according to Farm Bureau documents.

David Swenson, assistant scientist in economics, said the question is whether the TIF is being used as it was initially planned.

“Of late, TIF dollars have been shifting toward housing,” he said.

He said there is a lack of oversight in how TIFs are being used.

“No one ever said TIF is a bad tool,” Swenson said. “We don’t know because it doesn’t have any accountability.”

Tedesco said he is concerned with cities losing their local control.

“TIF is one of the tools that all size communities can use,” Tedesco said. “It’s one of the few things they have. It’s local and that’s important.”

Rep. Jim Kurtenbach, R-Nevada, said Stir Iowa is just one part of the big picture for economic development.

“Before we’re done, many options will be out there,” Kurtenbach said. “We’ll take the best components of each plan.”

He said the atmosphere exists for mutual agreement on both sides.

Tedesco, president of the Iowa League of Cities, said they are working on a plan of their own.

“We met with the governor and agreed that the tax system can be rehauled by 2005,” Tedesco said. “We think we have some new ideas people haven’t thought of yet.”

Swenson said Iowa is just starting to look at job quality. He said combined state and local efforts are not leading to better quality jobs.

“In 1980, we made 92 cents on the dollar,” he said. “Today we make 73 cents on the dollar.”

Tedesco said the fact that only 38 percent of communities use TIFs proves they are being used prudently.

“One of these days ISU students will have to go find a job,” Tedesco said. “If governments around the nation didn’t have tools to help with economic development, what would they do?”

Swenson said not all communities misuse TIFs.

“Ames has done a good job of being very selective with their use of TIFs and has done a good job with it,” he said.