Fiscal Year 2019 Budget

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Budget Impact: The reasoning for entering into a TIF rebate agreement is that a new development will increase the city's tax base over current value. This increase in the tax base is referred to as the increment, and it is this increment the city uses as an incentive to developers to locate in Spencer o to expand their current operations. All of the city's current development agreements offer a property tax rebate as the incentive, which means that the property party to the agreement will pay their tax bill in full. Once their taxes have bene paid, they apply to the city for a rebate (refund) of a portion of those taxes. Money that is generated by a TIF District can only be spent on projects that are located within the district and have been authorized by the city's Urban Renewal Plan. This plan dictates the types of projects authorized, gives details about specific projects and the maximum amount that can be used fro such projects. The city amends this plan from time to time when new projects are presented.

Future Concerns:

The single most pressuring concern with the use of TIF is the state legislature. It seems that every session of the legislature there is a bill or two introduced for consideration that would curb a city's ability to utilize TIF. TIF is the main source of incentives that a governmental body can use to attract new development to their community. Any tinkering with the current laws that would reduce the effectiveness or application of TIF will hamper the city's ability to grow the tax base, grow employment opportunities and grow the community.

TIF Utilization vs. District Valuation

TIF Incr Value

Taxable Valuation

100% Valuation

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100,000,000 200,000,000 300,000,000 400,000,000