What is a Tax Increment Financing Zone (TIF)?
A TIF is a financing tool used for community improvement projects. Because of the tunnel, the surrounding properties will see an increase in value. The increased property values increases tax revenues and that increase is the “tax increment.” That increment is dedicated to finance the debt issued to pay for the tunnel. To determine the increment, the TIF uses a base year of property values. In the case of the Waller Creek TIF, that year is 2007. So, for example, suppose a piece of property is valued at $100 in year 2007 and $110 dollars in 2008. The property taxes for the $100 portion will continue to go toward general City operations as in previous years. However, the property taxes collected from the incremental increase of $10 is now dedicated toward the project financing. A TIF does not mean there is an increase in taxes for the area. Rather, a portion of the taxes is simply dedicated.
