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chapelhillnews.com as Chapel Hill. N pHnt window C close window Q Published: qct 12, 2UU9 Amendment One: Useful development tool or corporate giveaway The state refereridum that will appear on the November ballot has support from local government leaders, but faces criticism from both liberal and conservative groups. By MATT DEES, STAFF WRITER CHAPEL HILL -Mayor Kevin Foy says there's only one pending project that would be affected by Amendment One, a state ballot referendum that would permit local governments, on a limited basis but without voter approval, to spend public dollars in support of private development. The proposed development of lots 2 and 5 in downtown Chapel Hill is a possible candidate for the so- called "self-financing bonds" Amendment One would allow, though they have been ruled out by the project consultant for now. But Foy and government leaders across the state still want the option, even as interest groups from all sides of the political spectrum line up to oppose the constitutional amendment. "Are they a good idea in every circumstance? No," Foy said "Are they potentially something that could be used in some areas? Yes." Self-financing bonds, formerly known as tax-increment financing before supporters decided that term turned voters off, work like this: Local governments agree to pay for improvements, such as roads, parking garages or new water and sewer lines, to a site slated for development. The additional property tax revenue generated by the project, in principle, goes to pay for the improvements. Organizations like the N C Citizens for Business and Industry, and prominent names in North Carolina politics including former governors Jim Hunt, Jim Martin and Jim Holshouser, are backing the amendment They argue tax-increment financing, called TIF, will allow local governments, particularly those in areas of the state hard-hit by plant shut-downs, to attract new development N C voters twice have rejected ballot initiatives to allow tax-increment financing to be used without voter approval, in 1982 and 1993. There are restrictions in the current form of the amendment. Only properties in a designated economic development district are eligible for the bonds, and the districts can make up no more than 5 percent of a town or city's land area. The bonds are supposed to target areas that have stagnated economically, though they haven't always been limited to such hard-hit regions in the 48 other states where they're legal. http://www,chapelhillnews.com/news/v-printer/story/ 1727196p-7991250c.html 10/ 13/2004