House committees hear Ways and Means’ tighter guardrails for CHIP, TIF use of education property tax

Members of two House committees on Wednesday reviewed amendments from the House Ways and Means Committee that narrow how municipalities and developers could use the Community Housing Infrastructure Program (CHIP) and related tax increment financing (TIF). Charlie Kimball, a member of House Ways and Means and the committee’s reporter on the amendment, led the panel through the measure and its fiscal guardrails.

The change package adds a “but‑for” test, tightens eligible locations, lowers standard increment retention to 60% with an 80% retention available for projects that meet the bill’s affordable/middle‑income definition, sets annual and cohort caps on foregone statewide education property tax revenue, and establishes a pilot sunset and rulemaking requirements.

Why it matters: the bill would allow municipalities to retain part of the increase in property tax revenue generated by a development to repay infrastructure bonds, rather than remitting that revenue immediately to the Statewide Education Property Tax (the “education fund”). Committee members and staff framed the Ways and Means amendments as an effort to permit housing infrastructure financing while limiting possible long‑term drains on the education fund.

Kimball said the committee sought “to put some meaningful, reasonable guardrails around the use of the statewide education property tax.” He explained the package’s main elements: a but‑for test to show that the project would not occur or would be meaningfully delayed without CHIP/TIF assistance;…