Shortly after the legislation passed, the Minneapolis Community Development Agency warned the sweeping changes would severely shrink funding for community development programs throughout Minnesota with Minneapolis especially hard hit because of itscommitment to use development resources for neighborhood revitalization. MCDA officials estimated they would lose $27 million a year tax increment generated by current and future tax increment financing districts. This means the city will lose up to $27 million in MCDA revenue each year -- about $226 million over the next 10 years. The effect will be felt most severely in neighborhoods while large commercial development projects typically generate enough revenue to pay off their debts.

This shortfall compounds an anticipated financial challenge facing the MCDA, in which it had planned to use $20 million a year for 10 years in TIF dollars to finance Neighborhood Revitalization Program through 2009.

Rybak's solution includes funding the NRP over 15 years instead of 10 years, and spending the full $16-million NRP affordable housing reserve fund in the first year rather than over four years. After that, find additional revenue from outside the city from other levels of government and private investors. He also advocates using money gained from refinancing the Hilton Hotel and Gaviidae Common refinancing for long-term reform, and scale back top-level city administration.