In the wake of the suburban migration of the 1950s and 1960s, many urban cores were left with reduced population and tax bases at the same time that development costs began to increase due to decaying infrastructure and the land clearance required to develop “Brownfield” areas. Cities inevitably found that tax abatement alone would not guarantee development. Simply removing blight left large swaths of vacant and unimproved land, and the remediation of these blighted areas did not create, nor sustain, taxes for any municipalities involved.
In the 1970s, Tax Increment Financing (TIF) appeared in California and since has spread to 49 states, including the following communities in Missouri:
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[list_item icon=”icon-check” hex_color=”336699″]St. Louis[/list_item] [list_item icon=”icon-check” hex_color=”336699″]Lee’s Summit[/list_item] [list_item icon=”icon-check” hex_color=”336699″]Springfield[/list_item] [list_item icon=”icon-check” hex_color=”336699″]Independence[/list_item] [list_item icon=”icon-check” hex_color=”336699″]Kansas City[/list_item]
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From the development community’s standpoint, TIF provides a greater incentive for economic development. There is potential for a greater revenue stream for development, and TIF may be used in blighted, conservation and economic development areas.
During fiscal year 2006-07, the TIF Commission approved $66,551,172,01 in infrastructure related construction costs, broken out as follows:
[infobox last_column=”true” size=”col-12″ color=”blue”] [list]
[list_item icon=”icon-check” hex_color=”336699″]11.16% Road Related work and construction[/list_item] [list_item icon=”icon-check” hex_color=”336699″]3.42% Sidewalk related work and construction[/list_item] [list_item icon=”icon-check” hex_color=”336699″].02% Sewer related work and construction[/list_item] [list_item icon=”icon-check” hex_color=”336699″].01% Streetlight related work and construction[/list_item] [list_item icon=”icon-check” hex_color=”336699″].00% Traffic light related work and construction[/list_item] [list_item icon=”icon-check” hex_color=”336699″]28.13% Garage related work and construction[/list_item] [list_item icon=”icon-check” hex_color=”336699″].06% Interest[/list_item] [list_item icon=”icon-check” hex_color=”336699″]1.68% Other[/list_item] [/list]
[/infobox]In addition to the aforementioned approved infrastructure related construction costs, non-infrastructure costs in the amount of $40,252,886.15 were certified by TIFC . These costs are broken out as follows:
[infobox last_column=”true” size=”col-12″ color=”blue”] [list]
[list_item icon=”icon-check” hex_color=”336699″]44.55% Construction[/list_item] [list_item icon=”icon-check” hex_color=”336699″]2.13% Acquisition, demolition and relocation[/list_item] [list_item icon=”icon-check” hex_color=”336699″].41% Management fees[/list_item] [list_item icon=”icon-check” hex_color=”336699″]1.41% Interest[/list_item] [list_item icon=”icon-check” hex_color=”336699″]7.02% Other[/list_item] [/list]
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