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There are two approaches to working with states that have policies forbidding local municipalities to pass new taxes. The first is to petition the state for permission, sometimes called a "local tax option bill." The second is to mount a statewide campaign to create RETTs that are shared among localities. Going statewide involves a large number of interests and requires a great deal of coordination. Statewide efforts may not make sense if opposition is not expected. However, state level campaigns have the advantage of bringing in many allies, such as housing finance agencies, and can have a redistributive effect by collecting the tax from all areas of the state, including areas with more rapid growth.
RETTs are a perfect complement to a variety of affordable housing tools, especially housing trust funds. Assigning some or all of the revenue from a RETT to a housing trust fund both ensures a dedicated source of funding for housing and makes the tax easier to pass in the first place, because the tax clearly addresses the broadly understood need for more housing. RETTs can also be tied to other housing programs, depending on the needs of a locality.
Other groups, especially conservation and education proponents, are also looking to RETTs for funding. Forming coalitions and crafting policies that allocate revenues to other programs, can be an effective strategy in uncertain climates.
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