Tax Increment Financing (TIF) is a unique tool available to cities and counties for the redevelopment of urban areas. It is used to leverage public funds to promote private sector activity. Property values in certain areas are capped or frozen at the assessed value for a particular base year. Thereafter, any tax revenues due to increases in property value in excess of the base year value are dedicated to the redevelopment area. Taxing entities, which contribute to the tax increment, continue to receive property tax revenues based on frozen value and are available for general government purposes. Any funds received from a tax increment financing area must be used for specific redevelopment purposes outlined in the statute, and not for general government purposes.
Tax increment financing was originally developed over 30 years ago as a method to meet the local match requirements of federal grant programs. With the reduction in federal funds available for local projects, tax increment financing is standing ever more on its own as a method to finance local redevelopment. The Community Redevelopment Act calls for private sector involvement to the maximum extent possible, to coordinate public and private sector initiatives and successfully revitalize communities which would otherwise further decline.
- TIF is a revenue mechanism that pledges the anticipated future CRA revenues to pay the debt service on revenue bonds. Revenue bonds are used to pay for improvements within the CRA districts as outlined in the redevelopment plans.
- TIF may be used by any Florida city or by any county, provided that a county can function within the corporate limits of a city only when the governing body of the city has by resolution authorized it.
- TIF revenues are to be deposited into a separate trust fund, and separate from municipality general funds, and can solely be used for redevelopment projects and programs within the areas as specified in the adopted redevelopment plan.
- The CRA is a dependent taxing district established by City government for the purpose of carrying out redevelopment activities that include reducing or eliminating blight, improving the tax base, and encouraging public and private investments in the CRA. The City Council is the official Community Redevelopment Agency for Clearwater.
- A public solicitation to developers and /or property owners to redevelop a parcel or group of parcels in accordance with specific guidelines set forth by the CRA. The guidelines may include use, or a mix of uses, density, building height and setback requirements, parking and open space standards, or their conditions. These standards are often set forth in a design for development. RFP's are most often used to attract proposals for agency-owned parcels.
- Planning, development, replanning, redesign, clearance, reconstruction, or rehabilitation of all or part of a project area. Redevelopment is a comprehensive effort to eliminate blight and otherwise improve an area through a commitment of public funds and actions. Redevelopment usually entails constructing and rehabilitating housing, improving public facilities, promoting employment opportunities and encouraging private investment.
- The fair value of a piece of property, based on the "highest and the best use." That is the use (and intensity of use) permitted by land use and zoning codes which result required by law to pay the fair market value for property it acquires, and must use independent private appraiser to set the values it offers to property owners.
- It is important to note that higher taxes from the sale, development or rehabilitation of property reflect a rise in property value and not an increase in tax rates. Until a property is improved or sold, assessed values and tax rates in redevelopment areas are restricted by Proposition 13 limitations.
- No. The property tax increment from the property taxes that are currently assessed and repaid for by the taxing districts with the CRA area.
- No. Only properties that are located within the defined CRA area are affected by the tax increment.
- A special district is similar to municipalities and counties. They are more alike than they are different. They all have a governing board with policy-making powers. They all provide essential public services. They all operate within a defined geographical area. What is the difference? The primary difference is their purpose. Municipalities and counties provide general governmental services. A Special District provides specialized purpose government and focus only on those benefiting from the services. In general, the special district has the following characteristics:
- Have a governing board with policy-making powers
- Operate within a limited geographical area
- Are usually created by general law, special act, local ordinance, inter-local agreement, or by rule of the Governor and Cabinet.
The following are NOT special districts:
- General-Purpose Governments (Cities and Counties)
- School Districts
- Community Colleges
- Municipal Service Taxing or Benefit Units
- Seminole and Miccosukee Tribe Special Improvement Districts
- Boards providing electrical services that are political subdivision of a municipal part of a municipality
- Entities with governing boards that do not have policy-making powers, such as advisory boards