TIF for Tat

By Robert Wilonsky Wed., Jun. 21 2006 at 4:22 PM

Categories: News

A Friend of Unfair Park with a extensive working knowledge of tax increment financing districts--or TIFs--sends this missive to set straight all those who think folks like Ross Perot Jr. and Tom Hicks and, well, just about every wealthy developer in town are getting free rides for turning sinkholes into swimming pools (and, man, is there a nice one at the W). So, Friend, the Midway is yours:

"There seems to be good deal of confusion about this topic (the mayor and James Ragland, just to name two).

Property owners within a Tax Increment Financing district do pay property taxes.

In the creation of a TIF, property taxes are frozen at the levels that existed at the creation of the TIF for a specified period of time. Property owners continue to pay taxes at that frozen level to the applicable jurisdictions.

The difference between the frozen appraisal and the annual increase in assessed valuation (still paid by the property owners) is returned to the TIF district for use in specified capital improvements (streets, drainage, lighting, etc.) within the district's boundaries, rather than going into any taxing jurisdiction's general fund. When the TIF expires, property owners pay taxes based on what is hopefully a substantial increase in assessed valuation created during the time the TIF was in place.

It should also be noted that the City of Dallas foregoes less than half of the property-based taxation from a TIF within its boundaries--the county, the school district, DCCCD, etc. collectively make up almost 60 percent of taxed valuation on an individual property. All taxing jurisdictions must approve the creation of a TIF before it can be formed.

I don't know if this is helpful and clear, but I certainly feel better."

That's why we're here. --Robert Wilonsky

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