----- Original Message -----
From: <[EMAIL PROTECTED]>
To: "Multiple recipients of list" <[EMAIL PROTECTED]>
Sent: Wednesday, December 06, 2000 10:54 PM
Subject: TIF Decertification
> Something about the numbers in the post from MCDA's Jack Kryst just didn't
> seem to add up. The amount of tax capacity added when the districts were
to
> be decertified in 2009 seemed extremely small - about $31 million. That
> couldn't be right, could it?
After discussing the really big numbers that describe the City's estimated
market value I suppose the tax capacity numbers seem small. The City's total
captured tax capacity is approximately $54.7 million for tax collected in
2001. $31 million is a big piece of the total. Keep in mind that we are
talking about tax capacity, the number to which the local tax rate is
applied to determine the amount of property tax a property own pays.
After March 31 of this year, TI from the pre-1979 may only be used for
currently existing debt service. That restriction will continue until 2009
when these districts must by law be decertified. They are all part of the
Common Project and the balance of Common Project Debt will be serviced by
the remaining Common Project districts.
Incidentally, The Minnesota Department of Trade and Economic Development
(DTED) publishes a great Tax Increment Financing reference which discusses
both the Minnesota property tax system and the working of TIF is a way which
even I almost understand it. DTED makes it available in PDF format at their
website at: http://www.dted.state.mn.us/01x00f.asp
An early post asked about the distinction between NRP Debt and Obligation.
There is no NRP "debt" outside of whatever bills my friend, Bob Miller, has
on his desk to pay.
The MCDA has a mandated "obligation" to fund the NRP at a rate of $20
million per year for twenty years. This obligation is met from a combination
of TIF revenues and other Agency sources when the available annual TIF is
insufficient after debt service obligations are met. Lest anyone be alarmed
-- it was anticipated at the outset that sufficient TIF might not be
available each year to provide $20 million and this is, in fact, the case.
Non-TIF agency resources make up the difference. The program is fully funded
as planned.
