To the Editor:
I offer a brief description of tax increment financing and the enterprise zone and some differences:
1. TIF is a state program that uses your property taxes, based on the equalized assessed value of your home. Take the amount of property taxes paid today as the starting point, and as property values go up, any money collected above that line becomes TIF funds that the city holds onto until spent. This money would have gone to the school district, the county, etc.
2. The TIF lasts up to 23 years. A maximum length TIF issued today would go until 2041. In 2041 it could be extended until 2053 with the approval of the General Assembly. A TIF binds future mayors, aldermen, school boards and county boards for all those years. Only the city can spend the money, and the school board, county board, etc. have no vote on how the money is spent.
3. The school district gives up the most money, because if gets the largest amount of property taxes. Using the school district as an example, as the costs go up, the amount of money it gets remains at 2018 level, like a fixed income. The school district still must pay all its bills. In effect, your taxes go up because the school district must get money. So it issues a new bond or other funding mechanism.
4. I believe that the enterprise zone is a better way. The enterprise zone also is from the state. The county applied for and got it. Any new construction, or remodeling construction, in the enterprise zone gets tax breaks.
5. Important differences are that in the enterprise zone: A. When construction is done, the state refunds the money that the school district would lose in a TIF.
B. It does not bind mayors, school boards, or county boards.
C. It does not hold tax money.
D. It does not generate other school funding such as bonds, etc.
6. Downtown could become an enterprise zone. Note: Any area that has both a TIF and an enterprise zone, the TIF is the one that must be used.
Finally, I asked the City Council for information on TIF spending. How much was spent versus the financial benefit to the city. I still don’t know the answers to my questions. How can you decide the best way to plan and spend our tax dollars, if you have no accounting as to how the budget actually got spent?