What is tax increment financing (TIF)?
Tax Increment Financing (TIF) is a funding mechanism that dedicates ad valorem tax revenues that result from improved property values within a designated area over a prescribed period of time. This creates an incentive to work toward area improvements and allows a portion of tax revenues to be maintained for use within the area where the tax was paid.
Any increase in total taxable property taxes collected between the base year (which is 2014 for the Southwest County Improvement District, and was 2002 for both of Manatee County’s CRA districts which phased out by September 30, 2014) and each following year is called "the increment." Up to 95% of an increment may be deposited in a special trust fund for use solely within that designated area. At present, the BCC dedicates 50% of the increment.
The key to continued growth of the trust fund is attracting private market investment for new and improved housing and commercial buildings, which tends to increase surrounding property values, and the additional ad valorem tax revenue produced by new investment and increased value. It is important to note that TIF is not a tax, but a way to use a portion of the property tax already being generated within the district for district improvements that would otherwise be payable and used throughout the county.
To make the most effective use of TIF, the County can arrange for advances and loans of the available tax increment funds, seek out other County, State and Federal funding sources to use as matching funds for projects, and offer other incentives as appropriate and available to carry out area improvements.
What is a TIF District?
A TIF District is the designated area where the use of tax increment financing has been authorized by local ordinance Chapter 2-29 Taxation and Fiscal Procedures Manatee County Code of Laws as allowed by Article VIII of the Florida Constitution and Chapter 125 of Florida Statutes. The Southwest County Improvement District was established by ORD 14-028 by the Manatee County Board of County Commissioners June 3, 2014. The District became effective October 1, 2014.
What is the difference between a TIF District and a CRA?
These are similar but have distinct differences. A TIF District may be created by local ordinance for a variety of economic development and redevelopment purposes. A CRA (Community Redevelopment Agency) may be established by local ordinance when specific conditions of slum or blight have been determined to exist based on requirements of Florida Statute. A CRA must adopt a redevelopment plan, and TIF funds may only be used to accomplish the adopted redevelopment plan. A Community Redevelopment Agency functions under an independent board of directors, which in Manatee County, has been the Board of County Commissioners.
How are TIF District funding decisions made?
TIF revenue is maintained within the Southwest County Improvement Trust Fund. The annual funding of the Southwest County Improvement Trust Fund shall be in an amount not less than an amount equal to fifty percent (50%) of the Tax Increment. The Board of County Commissioners allocates TIF revenue from the trust fund as part of Manatee County’s annual budget process.
What is the status of the County CRA and districts?
The Southwest County Improvement District became effective October 1, 2014. The Community Redevelopment Agency dissolved as of September 30, 2014. The CRA Advisory Boards and bylaws were dissolved June 17, 2014.
The County will use the remaining funds collected in the areas formerly included within the County's South County Community Redevelopment Area and the 14th Street West Community Redevelopment Area, to maintain ongoing operating programs and activities authorized pursuant to Section 2-29-144, and in accordance with Ordinance No. 02-69 and Ordinance No. 02-67, respectively, for projects within their boundaries.
The County will establish a separate subaccount for each CRA where the remaining funds as of September 30, 2014, identified in Section 2-29-144 (d) shall be secured.
The use of these funds shall be for maintaining ongoing programs and activities authorized pursuant to Section 2-29-144, and in accordance with applicable law. At such time that the funds identified in Section 2-29-144 (e) have been depleted the Southwest County Improvement District will continue to fund those ongoing operational program cost.