Growing Smart Legislative Guidebook
Chapter 14: Devices and Tax Relief Programs Endnotes
 See, e.g., Duane Windsor, Fiscal Zoning in Suburban Communities (Lexington, Mass.: Lexington Books, 1979); B. Rolleston, "Determinants of Restrictive Suburban Zoning: An Empirical Analysis," Journal of Urban Economics 221, no. 1, (1987): 1-21; M. Wasylenko," Evidence of Fiscal Differentials and Intrametropolitan Firm Relocation," Land Economics 56 (1980): 339-49; and Robert Cervero, "Jobs-Housing Balancing and Regional Mobility," Journal of the American Planning Association 55, no. 2 (1989): 136-150.
 National Commission on Urban Problems, Building the American City (Washington, D.C.: U.S.G.P.O, 1968), 19; see also Norman Williams, "The Three Systems of Land-Use Control," Rutgers L.Rev. 25 (1970): 80-85 (discussion of impact of tax system on behavior of local governments in making land-use decisions).
 For a summary of studies on fiscal disparity among local jurisdictions in the Chicago metropolitan area and Virginia, see R.S. Richman and M.H. Wilkinson, "Interlocal Revenue Sharing: Practice and Potential," in Ideas and Options 1, no. 1 (1993): 3-6, published by the National League of Cities.
 See Myron Orfield, Jr., "Tax Base-Sharing to Reduce Fiscal Disparities," in Modernizing State Planning Statutes: The Growing Smart Working Papers, Vol. 1, Planning Advisory Service Report No. 462/463 (Chicago: American Planning Association, March 1996 ), 167-170.
 See, e.g., "Fresno County, Cities Fight Over Annexation," California Planning& Development Report 4, no. 8 (August 1989): 1, 4; Laurie Reynolds, "Rethinking Municipal Annexation Laws, Urban Lawyer 24, no. 2 (Spring 1992): 249; and Lori A. Burkhart, "Municipal Annexation: An Update on Issues and Controversies," Public Utilities Fortnightly 127, no. 9 (May 1, 1991): 47.
 Norman Williams, Jr., "Halting the Race for 'Good Ratables' and Other Issues in Planning Legislation Reform," in Modernizing State Planning Statutes: The Growing Smart Working Papers, Vol. 1, Planning Advisory Service Report No. 462/463 (Chicago: American Planning Association, March 1996 ), 58.
 Studies or commentaries on the Twin Cities tax-base-sharing system include: Gary T. Johnson, "Tax Base Sharing and Fiscal Disparities: A Retrospective," Municipal Management (Fall 1984): 67-72; Katharine C. Lyall, "Regional Tax Base Sharing — Nature and Potential for Success" in Robert W. Burchell and David Listokin, Cities Under Stress (Piscataway, N.J.: Rutgers University Center for Urban Policy Research, 1981), 493-500; Katharine C. Lyall, "Tax-Base Sharing: A Fiscal Aid Toward More Rational Land Use Planning," Journal of the American Institute of Planners 41, no. 2 (1975): 90-100; Note, "Minnesota's Metropolitan Fiscal Disparities Act — An Experiment in Tax Base Sharing," Minnesota L. Rev. 59 (1975): 927-963; Andrew Reschovsky and Eugene Knaff, "Tax Base Sharing: An Assessment of the Minnesota Experience," Journal of the American Institute of Planners. 43, no. 4 (1977): 361-370; Charles R. Weaver, "The Minnesota Approach to Solving Urban Fiscal Disparity," State Government XLV (Spring 1972): 100-105; and John W. Windhorst, "The Minnesota Fiscal Disparities Law," Land Use Law and Zoning Digest 28, no. 4 (1976): 7-12. See also W. Patrick Beaton, "Regional Tax Base Sharing: Problems in the Distribution Function," in Robert W. Burchell and David Listokin, Cities Under Stress (Piscataway, N.J.: Rutgers University Center for Urban Policy Research, 1981), 501-526; D.A. Gilbert, "Property Tax Base Sharing: An Answer to Central City Fiscal Problems," Social Science Quarterly 59, no. 4 (1979): 681-689; and Walter Vogt, "Tax Base Sharing: Implications from San Diego County," Journal of the American Planning Association 45, no. 2 (1979): 134-142.
 Myron Orfield, Jr., "Tax Base Sharing to Reduce Fiscal Disparities" in Modernizing State Planning Statutes: The Growing Smart Working Papers, Vol. 1, Planning Advisory Service Report No. 462/463 (Chicago: American Planning Association, March 1996), 169.
 The distribution formula itself has been the subject of some academic criticism on the grounds that if it were modified to take into account size of the population below the poverty level, the existence of special needs populations, and factors such as the age of the housing stock, the allocation to individual communities would be based on a more precise definition of need. See Gary T. Johnson, "Tax Base Sharing and Fiscal Disparities: A Retrospective," Municipal Management (Fall 1984): 70, citing Andrew Reschovsky and Eugene Knaff, "Tax Base Sharing: An Assessment of the Minnesota Experience," Journal of the American Institute of Planners 43, no. 4 (1977): 67; and D.A. Gilbert, "Property Tax Base Sharing: An Answer to Central City Fiscal Problems," Social Science Quarterly 59, no. 4 (1979): 684.
 R.S. Richman and M.H. Wilkinson, "Interlocal Revenue Sharing: Practice and Potential," 11-23; see also Gary T. Johnson, "Tax-Sharing as an Alternative to Annexation: A Virginia Case Study," Urban Law and Policy 7 (1985): 243-254 (1985) (discussion of City of Charlottesville/Albermarle County agreement).
First, population indices are calculated by dividing each locality's population by the combined populations of both jurisdictions. Second, "relative tax effort" indices are calculated by dividing each jurisdictions true real property tax rate by the combined true real property tax rates of the two communities. Third, a composite index for each community is computed by averaging these two indices. Fourth, each jurisdiction's share of the fund is calculated by multiplying the community's composite index by the fund itself. Finally, net transfers of wealth are obtained by subtracting each locality's share of the fund from [its] contributions to it.
 Office of Strategic Research, Ohio Department of Development, Joint Economic Development Districts (Columbus, Oh.: ODOD, December 1995). This report includes executive summaries of the Akron joint economic development district contracts.
 Montgomery County, Ohio, Summary of 1995 Economic Development/Governmental Equity (ED/GE) Program (Dayton, Oh.: Montgomery County, 1995); William J. Pammer, Jr., and Jack L. Dustin, "Fostering Economic Development through County Tax Sharing," State and Local Government Review 25, no. 1 (Winter 1993): 57-69 (this article includes an extensive discussion of the development of the contribution and distribution formulas); Ann Schenking, "Economic Development/Governmental Equity Program: Providing a Competitive Edge for Montgomery County, Ohio," Economic Development Commentary 19, no. 3 (Fall 1995): 18-24; and Jack L. Dustin, Cooperative Communities — Competitive Communities: The Role of Interlocal Tax Revenue Sharing, Ohio Task Force on Competitiveness and Cooperation Monograph Series (Dayton, Ohio: Wright State University Center for Urban and Public Affairs, 1994).
 Colo. Rev. Stat. Ann. 29-1-203 (West 1989); K.R.S. 65.210 to 65.300 (1995); K.R.S. 65.245 specifically authorizes cooperative interlocal agreements for the sharing of revenues; and Mich. Comp. Laws. 124.501 to 124.512 (1991). Mich. Comp. Laws 124.505 authorizes interlocal agreements for sharing revenues and for the benefit of local government units; see also R.S. Richman and M.H. Wilkinson, "Interlocal Revenue Sharing: Practice and Potential," 26-27 (discussing an interlocal revenue-sharing and development regulation agreement between the cities of Westminster and Thornton, Colorado, and a joint economic development agreement between the cities of Detroit and Hamtramck, Michigan).
 The model legislation in Section 14-101 et seq. was drafted by the Hon. Myron Or field, Jr., a Minneapolis attorney who is a state representative in Minnesota. It is based on the Twin Cities tax-base-sharing statute as well as a model published by the U.S. Advisory Commission on Intergovernment Relations (ACIR), "Metropolitan Tax Base Act," Bill No. 3.108 (Washington, D.C.: ACIR, 1984).
 This figure can instead be tied to some value that is a multiplier of the average value of a single-family home in the region or metropolitan area. For example, if the average value of a single-family home in a given tax year is $100,000, the definition of "excess residential property" could be 150 percent ($150,000) or 200 percent ($200,000) of the average value. Using this approach would require that the average value be calculated each year but would eliminate the need to change the amount in the statute.
 Qualifying local units should be chosen so that they will cover the entire area, with no overlap, and where standard demographic information, such as population, is readily available for each unit. Generally, counties or municipalities could be used, but not both. If municipalities are used, but there are unincorporated places within the area, those places should also be treated as qualifying units. Where a population threshold is used for qualifying local units, it would be equivalent to assigning those units that fall below the threshold a contribution value and distribution value equal to zero.
 Mich. Comp. Laws 124.505 (1991); Ohio Rev. Code 715.69 to 715.71 (1995) (these sections cover "joint economic development zones" for municipalities and "joint economic development districts" for municipalities and unincorporated townships); and Code of Va., Ch. 26.2:1 (1994).
 See generally Donald G. Haman and Julian C. Juergensmeyer, "Urban Renewal and Downtown Revitalization," in Urban Planning and Land Development Control Law, (2nd Ed.) (St. Paul, Minn.: West, 1986), 526-553; Daniel R. Mandelker, Gary Feder, and Margaret Collins, Reviving Cities with Tax Abatement (New Brunswick, N.J.: Center for Urban Policy Research, 1980) (analysis of impact of Missouri Urban Redevelopment Corporations Law).
 An interesting and useful book on brownfields is Todd S. Davis and Kevin D. Margolis, eds., Brownfields: A Comprehensive Guide to Redeveloping Contaminated Property, (Chicago: Amer. Bar Ass'n, 1997). See also Michael B. Gerrard, Brownfields Law and Practice, 2 vol. (New York: Matthew Bender, 1999); Peter B. Meyer and Thomas S. Lyons, "Lessons from Private Sector Brownfields Redevelopers: Planning Public Support for Urban Regeneration," Journal of the American Planning Association, 66, No. 1 (Winter 2000):46-57.
 42 U.S.C. 9601(20)(A). Conversely, the courts have found lenders with a role in the management of the premises to be liable for cleanup costs. U.S. v. Fleet Factors Corp., 901 F.2d 1550 (11th Cir. 1990).
 Del. Code Ann. tit. 7, 9105; 415 Il. Comp. Stat. 5/58.9 (liability for costs for voluntary cleanup assigned on a fault basis, damages proportional to polluter's portion of fault); Ohio Rev. Code 3746.26(A)(1)(b) (lenders not liable so long as they do not actually manage or operate any hazardous waste activities on the premises, even if they have the power to manage the premises); 35 Pa. Cons. Stat. Ann. 6027.1 et seq. (lenders liable for contamination only if they caused or exacerbated contamination, or compelled their borrower to do so).
 This is the most common approach, adopted by at least 25 states. See e.g., Cal. Health& Safety Code 25300 et seq.; Mich. Comp. Laws 20101 et seq.; Me. Rev. Stat. tit. 38, 343-E; Minn. Stat. 115B.175; Neb. Rev. Stat. 81-15,181 et seq.; Ohio Rev. Code 3746.01 et seq.; Pa. Stat. tit. 35, 6026.101 et seq.; Wisc. Stat. 292.11 et seq..
 See Diane R. Suchman, "Mixed-Income Housing" in Developing Infill Housing in Inner-City Neighborhoods (Washington, D.C.: Urban Land Institute, 1997), 59-81; Jon C. Teaford, The Rough Road to Renaissance (Baltimore, Md.: Johns Hopkins University Press, 1990), 249-250, 305.
 A good introduction to tax increment financing is Sam Casella, Tschangho John Kim, Clyde W. Forrest, and Karen A. Przypyszny, Tax Increment Financing Planning Advisory Service Report No. 389 (Chicago: Amer. Planning Ass'n, 1985). See also Donald G. Haman and Julian C. Juergensmeyer, Urban Planning and Land Development Control Law, 2nd Ed. (St. Paul, Minn.: West, 1986), 551-553; Jonathan Davidson, "Tax-Related Development Strategies for Local Government," in J. Benjamin Gailey, ed., 1985 Zoning and Planning Law Handbook, (New York: Clark Boardman Co., 1985) 234-241; Christina G. Dudley, "Tax Increment Financing for Redevelopment in Missouri: Beauty and the Beast," U. Mo. K.C. L. Rev 54. (1985): 77; Jonathan M. Davidson, Tax Increment Financing as a Tool for Community Development," U. Det. J. Urb. L. 56 (1979): 405.
 City of Tucson v. Corbin, 623 P.2d 1239 (Ariz. Ct. App. 1980); Miller v. Covington Dev. Auth., 539 S.W.2d 1 (Ky. 1975). But see Metropolitan Dev.& Housing Agency v. Leech, 591 S.W.2d 427 (Tenn. 1979).
 Alan C. Weinstein& Maxine Goodman Levin, "Tax Increment Financing," Chapter 33B in Patrick J. Rohan& Eric D. Kelly, eds., Zoning and Land Use Control, Vol. 6 (New York: Matthew Bender& Co. 1998).
 There is considerable literature on the subject of the effectiveness of tax incentives. Some useful examples are Timothy Bartik, Who Benefits from State and Local Economic Development Policies? (Kalamazoo, MI: W.E. Upjohn Institute for Employment Research, 1991); Roger Wilson, State Business Incentives and Economic Growth: Are They Effective? A Review of the Literature (Lexington, KY: Council of State Governments, 1989); Rachel Weber, "Why Local Economic Development Incentives Don't Create Jobs: The Role of Corporate Governance," Urban Lawyer 32, no. 1 (winter 2000): 97; Margaret Dewar, "Why State and Local Economic Development Programs Cause So Little Economic Development," Econ. Dev. Q. 12 (1998): 68; and Michael Wolkoff, "Chasing a Dream,: The Use of Tax Abatements to Spur Urban Economic Development," Urban Studies 22 (1985):305-315.
 Deluxe Theatres, Inc. v. City of Englewood, 198 Colo. 85, 596 P.2d 771 (1979); 508 Chestnut Inc. v. St. Louis, 389 S.W.2d 823 (Mo. 1965); Visina v. Freeman, 252 Minn. 177, 89 N.W.2d 635 (1958); Dole v. Philadelphia, 337 Pa. 375, 11 A.2d 163 (1940).
 Denver Urban Renewal Authority v. Byrne, 618 P.2d 1274 (Colo. 1980); American Linen Supply Co. v. Dep't of Revenue, 617 P.2d 131 (Mont. 1980); State ex rel. Atkinson v. Planned Industrial Expansion of St. Louis, 517 S.W.2d 36 (Mo. 1975); Dayton v. Cloud, 30 Ohio St.2d 295, 285 N.E.2d 42 (1972).
 The American Farmland Trust, at www.farmland.org, is an excellent clearinghouse of resources on agricultural preservation. A good specific document to examine is American Farmland Trust, Saving American Farmland: What Works (Washington, D.C.: American Farmland Trust, 1997).
 For an early evaluation of differential assessment of farms and open space, see John C. Keene et al., Untaxing Open Space, prepared for the U.S. Council on Environmental Quality (Washington, D.C. : U.S. GPO, April 1976).
 American Farmland Trust, Saving American Farmland: What Works (Washington, D.C.: American Farmland Trust, 1997), ch. 7 (Agricultural District Programs), 197. The states include Delaware (Del. Code tit. 3, 901 to 930), Illinois [35 Ill. Comp. Stat. 200/10-110 to -147 (differential assessment in agricultural districts), 55 Ill. Comp. Stat. 5/5 -12001, -12007 to -12019 (restriction on county's power to regulate agricultural uses), 505 Ill. Comp. Stat. 5/1-20.3 (creation of agricultural districts), 740 Ill. Comp. Stat. 70/0.01 to 5 (limit on nuisance liability for farming)], Iowa (Iowa Code 335.27, 352.1 to .13), Kentucky (Ky. Rev. Stat. Ann. 262.850), Maryland (Md. Code Ann., Agric. 2-501 to -516; Tax& Prop. 8-209), Massachusetts (Mass. Gen'l Laws ch. 40L, 1 et seq.), Minnesota (Minn. Stat. 40A.01 et seq., 473H.01 et seq.), New Jersey (N.J. Rev. Stat. 4:1C-1 to -55), New York (N.Y. Agric.& Mkts. Law 300 to 310), North Carolina (N.C. Gen. Stat. 106-735 to -744), Ohio (Ohio Rev. Code Ann. 929.01 to .05), Pennsylvania (3 Pa. Cons. Stat. 901 to 915), Tennessee (Tenn. Code Ann. 43-34-101 to -108), Utah (Utah Code Ann. 17-41-401 to -406), and Virginia (Va. Code Ann. 15.1-1506 to -1513, 58.1-3229 to -3252). The entire set of statutes may be viewed at: http://www.farmlandinfo.org/fic/laws/kwagdis.html
 Cal. Gov't Code 51230 (1999). For an excellent review of this act, see Dale Will, "The Land Conservation Act at the 32 Year Mark: Enforcement, Reform, and Innovation," San Joaquin Agricultural L. Rev. 9 (1999): 1
 Minn. Stat. Ann. 47H.04, subd. 2. Under the statute, "long-term agricultural land" eligible for designation as an agricultural preserve means land in the metropolitan area designated for agricultural use in local or county comprehensive plans and which has been zoned specifically for agricultural use permitting a maximum residential density of not more than one unit per quarter/quarter. Id., 47H.0$, sub. 7.
 It is important to note that the average size of an economically viable farm may differ from state to state and indeed from region to region within a state. It is recommended that the most current U.S. Census of Agriculture be consulted for average farm size when setting the minimum size requirement for parcels or combination of parcels under common ownership to be eligible for an agriculture assessment. For a good discussion of this issue, see Robert E. Coughlin, "Formulating and Evaluating Agricultural Zoning Programs," Journal of the American Planning Association 57, No. 2 (Spring 1991): 183-192, esp. 189 (discussion of preferred density at which land use conflicts between agricultural activity and nonfarm residential uses will be acceptably low to farmers).
 Norman Williams, Jr.., "Halting the Race for 'Good Ratables" and Other Issues in Planning Legislation Reform," in Modernizing State Planning Statutes: The Growing Smart Working Papers, Vol. 1, Planning Advisory Service Report 462 (Chicago: American Planning Association, 1996): 57-61.
 Government financing of schools began in Massachusetts in 1647, when the state's General Court passed the famous Old Deluder Satan Act, which required every town to set up a school or pay a sum of money to a larger town to support education. The act required towns with at least so families to appoint a teacher of reading and writing, and required towns with more than 100 families to also establish a secondary school. The Act required that there schools be supported by masters, parents, or local citizens, thereby providing for the financing of schools through local taxation. The first local property tax for schools was levied in Dedham, Massachusetts, in 1648. John D. Pulliam, History of Education in America, 4th ed. (Columbus, Ohio: Merrill, 1987).
 As noted by Odden and Picus, states have differed in their approach to the local contribution.Though most districts levy a tax rate at or above the minimum required local rate, a few do not. A policy issue for states is whether to impose the minimum rate on such districts or reduce their state foundation aid. The difficulty with such draconian state measures arises from the fact that many of these low-tax districts are also quite poor, with low property wealth and low income. Generally, states have not enforced the minimum tax in these districts. Rather, some states (e.g., New York and Michigan) make full foundation aid payments to districts regardless of local tax effort. In this way, low-tax districts sustain only a local revenue loss. Other states (e.g., Texas) reduce state foundation aid in the same proportion that the local tax rate falls below the designated minimum rate. See A. Odden and L. Picus, School Finance: A Policy Perspective, 2d ed. (Boston: McGraw Hill, 2000).
 Richard Salmon, Christina Dawson, Stephen Lawton, and Thomas Johns, Public School Finance Programs of the United States and Canada: 1986-87 (Sarasota, Fl.: American Education Finance Association, 1988).
 Steven D. Gold, David M. Smith, and Stephen Lawton, Public School Finance Programs of the United States and Canada: 1993-94 (New York: Center for the Study of the States, the Nelson A. Rockefeller Institute of Government, and the American Education Finance Association, 1995). In a widely-heralded school finance reform effort, Michigan adopted a foundation funding system in 1994-95. For an analysis of this reform, see M. Addonizio, C.P. Kearney, and H.J. Prince, "Michigan's High Wire Act," Journal of Education Finance 20 (Winter 1995): 235-269.
 McInnis v. Shapiro, 293 F.Supp. 327 (N.D.Ill.1968), affirmed sub nom. McInnis v. Ogilvie, 394 U.S. 322, (1969), and Burruss v. Wilkerson, 310 F.Supp. 572 (W.D.Va.1969), affirmed 397 U.S. 44 (1970).
 The education article of a state constitution may also be invoked by "indirect application," through arguments that the article's language establishes education as a fundamental right with equal protection guarantees requiring strict scrutiny analysis.
 Further, in a somewhat unusual turn, the court compared Kentucky's elementary and secondary education system with national and neighboring norms in terms of fiscal performance and student achievement, finding Kentucky substandard in both instances.
 The Kalkaska School District in Michigan closed its doors in mid-March of 1993 after local voters defeated a millage renewal. This early school closing, which received national attention, was a critical factor in Michigan's abandonment of GTB and adoption of its current foundation funding system the following year. For a full account and analysis, see Addonizio, Kearney, and Prince supra.
 For a more complete discussion of SEEK, see J.E. Adams and W.E. White, "The Equity Consequence of School Finance Reform in Kentucky," Educational Evaluation and Policy Analysis 19 (1997): 165-184.
 In 1996-97, 161 of Kentucky's 176 school districts participated in Tier I at the maximum level, while the remaining 15 participated to some degree. In addition, 161 districts participated in Tier II to some extent. Office of Educational Accountability, 1997 Annual Report (Frankfort, Ky.: Kentucky General Assembly, 1997).
 J.E. Adams, "Kentucky: A Decade Since Rose," in The Political Economy of Education: The State of the States and Provinces 1999, B. Brendt., ed. (Rochester, N.Y.: University of Rochester, 1999), 77-82.
 This section draws on C. Clark, "Introduction to Texas School Finance," in The Political Economy of Education: The State of the States and Provinces 1999, B. Brent, ed. (Rochester, N.Y.: University of Rochester, 1999), 197-202.
 For a detailed analysis of the Michigan foundation program and related reforms, see M. Addonizio, C.P. Kearney, and H.J. Prince, "Michigan's High Wire Act," Journal of Education Finance 20 (Winter 1995): 235-269.
 M. Addonizio, "You Can't Always Get What You Want: Property Tax Relief and School Funding in Michigan," in The Political Economy of Education: The State of the States and Provinces 1999, B. Brendt., ed. (Rochester, N.Y.: University of Rochester, 1999), 111-116.
 W.J. Mathis, "The State of the State: Vermont's Act 60 Finance Reform," in The Political Economy of Education: The State of the States and Provinces 1999, B. Brendt., ed. (Rochester, N.Y.: University of Rochester, 1999), 209-212.
 Public School Finance Programs of the United States and Canada, Steven D. Gold, David M. Smith and
Stephen B. Lawton, eds. (Albany, NY: American Education Finance Association and Center for the Study of the States, The Nelson A. Rockefeller Institute of Government, State University of New York, 1995), 48-52.
 See the discussion of state impact fee enabling statutes preceding Section 8-602 (Development Impact Fees) of the Legislative Guidebook. See generally C.L. Siemon and M.J. Zimet, "School Funding in the 1990s: Impact Fees or Bake Sales," Land Use Law and Zoning Digest 44, No. 7 (July 1992): 3-9.