Political Quandary Looms for Governor Burgum as Legislation Clashes With His Private Business Interests

Yesterday House lawmakers passed SB2166 by a 75-17 vote. The bill had previously in the Senate on a 38-8 vote.

“The bill forbids cities from creating TIF districts in existing renaissance zones and forbids the state Department of Commerce from authorizing renaissance zones in existing TIF districts after July 31,” my colleague Tu-Uyen Tran reports.

So, essentially, the bill prohibits double dipping on economic incentives. It would also require that city governments get buy-in from counties and school districts on any proposed tax incentive that would last for longer than five years. Which makes sense since those entities also collect revenues from property taxes which are impacted when those taxes are abated.

The House and Senate are going to have to work out some differences over this bill in conference committee. The double dipping language was in the original bill as it was introduced in the Senate but was amended out. The House restored it.

But supposing the House and Senate agree to keep the language – and I hope they do – it will create a political quandary for Governor Doug Burgum.

[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#ffffff” txt_color=”#000000″]The $98 million Block 9 project in Fargo is one of Burgum’s, and one which double dipped on both TIF and Renaissance Zone incentives. Fargo Mayor Tim Mahoney is claiming the project wouldn’t have happened had that double dipping not been possible.[/mks_pullquote]

For one thing, this policy has major implications for his existing businesses. The $98 million Block 9 project in Fargo is one of Burgum’s, and one which double dipped on both TIF and Renaissance Zone incentives. Fargo Mayor Tim Mahoney is claiming the project wouldn’t have happened had that double dipping not been possible.

(It’s worth noting that Burgum, before taking office, stepped back from the day-to-day operations of his businesses.)

For another thing, Burgum’s much-touted but still largely amorphous Main Street Initiative would likely be dealt a setback by any curtailing of incentives. Burgum has long been an evangelist for denser, downtown-centric development. He’s argued that less dense development on the outskirts of communities is subsidized by taxpayers who foot the bill for the expansive infrastructure needed to sustain that development (roads, schools, police and fire protection, snow removal, etc.). He justifies subsidies for downtown development by suggesting they offset what he holds as subsidies for development which pushes the boundaries of a community outward.

It’s not an unfair point, though I’d argue that the solution isn’t subsidies for downtown development so much as trying the infrastructure costs of outward development to that development. But Burgum’s views are what they are.

Which brings us back to SB2166. Assuming it reaches Burgum’s desk in its current form, what will he do? Move to keep in place a regime of incentives double dipping which his business ventures have used repeatedly? Or side with lawmakers who feel these programs have been abused?

Earlier this week columnist Mike Jacobs wrote about how Burgum has been a relatively low profile governor so far. This bill, depending on how it reads when it reaches Burgum’s desk (if it gets there at all) could tell us a lot about how Burgum intends to govern.