July 23, 2014 at 2:10 p.m.
Redevelopment, TIF may be good for all (01/17/06)
Editorial
Portland took an initial step toward establishing a redevelopment district Monday night.
Is it a smart move?
For the city of Portland, yes.
For the larger Jay County community, the answer is less clear, more like “yes, but ...”
A redevelopment district, which the city council hopes to have in place by March 1 in order to capture property taxes on the new Wal-Mart SuperCenter under construction, is a tool which allows municipalities to direct a portion of tax revenues from a particular area toward infrastructure improvements within that area.
It works using a complicated system known as tax increment financing, also known as TIF.
When a redevelopment district is created, the assessed valuations within the district are effectively frozen as far as other taxation units are concerned.
The other units still get the property taxes on the old assessed valuation, but property taxes on the new, higher assessed valuation flow directly to a redevelopment commission. That flow of revenue can be used to sell bonds to take on big infrastructure construction projects.
From a municipality’s standpoint, it’s clearly a good idea, targeting dollars to take on projects that can spur new development.
In Portland’s case, depending upon how the district’s boundaries are defined, it could be possible to direct some of the tax dollars from the SuperCenter to help fund infrastructure needs in the downtown business district.
It could also be possible to take on street and sewer projects in the area immediately surrounding the SuperCenter to assure that commercial growth in that part of town doesn’t overload the systems.
What’s less clear about redevelopment districts is their impact on other taxing units and the larger community.
While it’s true that those taxing units won’t see smaller property tax revenues, it’s also true that they won’t benefit from the rising assessed valuations that come with new development — at least to begin with.
Over the long haul, since TIF districts have limited life spans and tend to lead to development outside the original boundaries of the district, proponents believe everyone can benefit.
The key, according to a panel brought together last week by Portland Mayor Bruce Hosier, is that the redevelopment district be well run.
Consultants for the city urged a focus on making infrastructure improvements that will actually lead to new investment in Portland; they suggested avoiding “trophy” projects that don’t have a demonstrable impact on spurring commercial development.
If that advice is followed, if a reasonable limit on the life of the district is established, and if ways can be found to mitigate the impact on the county’s largest taxing unit (Jay Schools), then it is indeed a smart move. — J.R.[[In-content Ad]]
Is it a smart move?
For the city of Portland, yes.
For the larger Jay County community, the answer is less clear, more like “yes, but ...”
A redevelopment district, which the city council hopes to have in place by March 1 in order to capture property taxes on the new Wal-Mart SuperCenter under construction, is a tool which allows municipalities to direct a portion of tax revenues from a particular area toward infrastructure improvements within that area.
It works using a complicated system known as tax increment financing, also known as TIF.
When a redevelopment district is created, the assessed valuations within the district are effectively frozen as far as other taxation units are concerned.
The other units still get the property taxes on the old assessed valuation, but property taxes on the new, higher assessed valuation flow directly to a redevelopment commission. That flow of revenue can be used to sell bonds to take on big infrastructure construction projects.
From a municipality’s standpoint, it’s clearly a good idea, targeting dollars to take on projects that can spur new development.
In Portland’s case, depending upon how the district’s boundaries are defined, it could be possible to direct some of the tax dollars from the SuperCenter to help fund infrastructure needs in the downtown business district.
It could also be possible to take on street and sewer projects in the area immediately surrounding the SuperCenter to assure that commercial growth in that part of town doesn’t overload the systems.
What’s less clear about redevelopment districts is their impact on other taxing units and the larger community.
While it’s true that those taxing units won’t see smaller property tax revenues, it’s also true that they won’t benefit from the rising assessed valuations that come with new development — at least to begin with.
Over the long haul, since TIF districts have limited life spans and tend to lead to development outside the original boundaries of the district, proponents believe everyone can benefit.
The key, according to a panel brought together last week by Portland Mayor Bruce Hosier, is that the redevelopment district be well run.
Consultants for the city urged a focus on making infrastructure improvements that will actually lead to new investment in Portland; they suggested avoiding “trophy” projects that don’t have a demonstrable impact on spurring commercial development.
If that advice is followed, if a reasonable limit on the life of the district is established, and if ways can be found to mitigate the impact on the county’s largest taxing unit (Jay Schools), then it is indeed a smart move. — J.R.[[In-content Ad]]
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