City is creating a TIF District
The process of developing what is described as a powerful economic development tool continued moving toward reality on Tuesday night, getting a green light from Decatur City Council.
The tool is what is known as a Tax Increment Financing (TIF) District, which was sought by the city's new redevelopment commission.
The commission has designated four districts: riverfront, First St. corridor, downtown and 13th St. Once the TIF is established, any increase in tax revenue through increased assessed valuation in the four areas can be captured by the commission and used by it for economic development.
The increased tax revenues are the "tax increment."
TIF is designed, according to Wikipedia, to channel funding toward improvements in distressed or underdeveloped areas where development might not otherwise occur. TIF creates funding for "public" projects that may otherwise be unaffordable to localities, by borrowing against future property tax revenues.
"TIF does not create new taxes nor take away from other tax sources," City Attorney Tim Baker said at Tuesday's council meeting.
TIF, he continued, "benefits us in many different ways. It gives us a tool many other cities have."
The city plan commission has added its support. "This has been given a great deal of support," Baker noted.
Mayor John Schultz said the City of Berne used its TIF District to atrract the FCC plant now operating there.
"We are anxious to move forward and pleased you've given us this tool," said Ron Storey, a member of the redevelopment commission. Storey, Max Miller, Rex Hinsky and non-voting member Ben Faurote all attended the meeting. The other two members of the commission are Brent Arnold and Larry Isch.
The next step in the process will be a public hearing called by the redevelopment commission.
According to Wikipedia, thousands of TIF districts currently operate nationwide in the US, from small- and mid-sized cities, to the State of California, which invented tax increment financing in 1952. California maintains over 400 TIF districts with an aggregate of over $10 billion per year in revenues, over $28 billion of long-term debt, and over $674 billion of assessed land valuation (2008 figures). Wikipedia says.