Bob Spaulding's message about property taxes was forwarded to the List. It was a very good and clear explanation about how property taxes work. But his description of TIF taxes wasn't right so I thought I'd clear that up.
Bob wrote: ONE PROPERTY GETS A TIF DISTRICT; OTHERS PAY THE PRICE. TIF Districts are a tool that is meant to spur new development that wouldn't have happened without the help. Basically, if your property is in a TIF district, that means that all new value you add to your property through improvements will not contribute to the overall tax levy for a set period of time, say 20 years. There are arguably legitimate uses for TIF districts, but they are sometimes hard to differentiate from illegitimate uses. TIF districts are only warranted when there is NO chance a property would be SUBSTANTIALLY improved over the period of life of the TIF (20 years) without government assistance. Otherwise, the City is forgoing substantial tax revenue. <snip> This is why TIF DISTRICTS, WRONGLY APPLIED, CAN INCREASE HOMEOWNER'S TAXES DIRECTLY AND DRAMATICALLY. Mark Anderson here: Actually including property in a TIF district does not have any effect on the property taxes paid by the TIF properties. The taxes paid are simply allocated to a different jurisdiction. As the value of TIF property increases, the increased taxes that result are allocated solely to the TIF jurisdiction. TIF funds are normally spent to improve the infrastructure of the TIF district. In theory, the TIF taxes are self-funding, since the increased value of the TIF property (resulting in higher property taxes) may be attributed to the infrastructure spending of the TIF funds, which in turn brings in private development. In practice, it is often questionable whether the increased value is due to TIF spending, or for totally unrelated reasons. And even if the TIF spending does result in greater private spending in that district, it is likely that most of that spending simply replaces what would otherwise have been spent at other nearby non-TIF areas, adding no net development (or taxes) to the state as a whole. So I do agree with the conclusion above, that TIF districts often do result in higher taxes for everyone else. Mark V Anderson Bancroft REMINDERS: 1. Be civil! Please read the NEW RULES at http://www.e-democracy.org/rules. If you think a member is in violation, contact the list manager at [EMAIL PROTECTED] before continuing it on the list. 2. Don't feed the troll! Ignore obvious flame-bait. For state and national discussions see: http://e-democracy.org/discuss.html For external forums, see: http://e-democracy.org/mninteract ________________________________ Minneapolis Issues Forum - A Civil City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[email protected] Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls
