Cities and town governments may welcome 40T as “free” private money for infrastructure they can’t afford — often because they’re giving away too many subsidies to developers already. It will be used to end-run Proposition 2 1/2, since the “assessments” are not called “taxes” and no community vote is needed. And it will be a way to escape their own bond cap. But municipalities may end up cleaning up the mess if a project is abandoned, especially if they invest public pension money in those bonds.
Other ways exist for developers to fund their infrastructure without creating private governments, e.g., betterment districts (Ch. 80), Ch. 40Q District Improvement Financing, and Infrastructure Improvement Incentive (“I-Cubed”). Why are legislators pursuing this approach?
Governor Deval Patrick is not yet admitting to any position on 40T, but he is likely to approve, having chosen real estate lawyers as top advisers. This would be ironic, since he promised to reduce property taxes. Will he empower private developers to increase those taxes, on people who cannot even vote on it?