Matt Stiles reports that Mayor White will begin reviewing 22 Tax Increment Reinvestment Zones (TIRZs) to see if any should be helping to pay for the police and fire services their zones use:
White’s memo said a portion of some zones’ diverted tax revenues should be funneled back to the city to pay for other priorities.
As development occurs in these zones and property values rise, resulting tax revenue above a base level is funneled back into the zone to pay for improvements to attract private investment. The extra revenue is called an increment.
The zones account for about 3 percent of the city’s overall property-tax base, White said. In fiscal 2006, the zones should get about $30 million in increment revenue, said Judy Gray Johnson, the city’s finance and administration director.
The mayor said the zones are a useful tool in some areas.
He said they can provide stable funding for affordable housing and a venue for joint projects between the city and county. They also provide an economic incentive for developers.
But others have outlived their usefulness, he said, or they are asking to spend too much on administrative costs with money the city could better use for other purposes, such as increased police patrols.
“You can’t take the increased property taxes from one neighborhood and say that all that’s going to go to buildings and streets and parks in that neighborhood, without accounting for the fact that our first obligation is public safety,” White said.
Councilman Mark Ellis, who heads the council’s fiscal affairs committee, said some zones spend too much on legal fees and that their financing rates aren’t as low the city’s.
“In reality, they wind up costing more money than necessary,” Ellis said. “They also put an undue burden on property owners who are outside the zone.”
Mayor White is still a fan of TIRZs, apparently, since he recently helped create one for the new downtown Pavilions development.
