Tax-Increment Financing |

We would like to thank the Tom Tresser and the TIF Illumination Project of the Civic Lab for all their hard work and allowing us to use their articles and videos to educate Houston on TIF’s

“In 2014 alone, TIRZ’s collected $135.9 million in property taxes. Plenty of that money goes to support worthwhile projects, but those projects only exist within the boundaries of the districts. Meanwhile, drivers all across Houston have to navigate roads that look like they’re modeled from NASA’s new pictures of Pluto.”
http://www.chron.com/opinion/editorials/article/Fighting-inequity-6400511.php

Background on TIF:
Tax increment financing programs go back to 1952, when California became the first state to raise matching funds for federal urban development grants. Today, TIFs (Texas is the only state that calls its tax increment program a TIRZ) are a nationwide trend because of diminished federal financing for infrastructure. Aside from Arizona, every U.S. state has used the financing method that relies upon anticipated increases of property-tax revenues.
http://www.houstonpress.com/news/how-houston-uses-the-tirz-system-to-benefit-high-dollar-areas-and-ignore-poorer-neighborhoods-7497253

What is Tax-Increment Financing?
Tax-Increment Financing (TIFs) is used by City Council to attract new investment to an area. TIFs help finance the cost of redevelopment and encourage development in an area that would otherwise not attract sufficient market development in a timely manner. Taxes attributable to new improvements (tax increments) are set-aside in a fund to finance public improvements within the boundaries of the zone.
http://www.houstontx.gov/ecodev/TIRZ

Problems:

TIRZ are being used as a way to avoid Houston’s bureaucratic Revenue Cap

There is no accountability for TIRZ board of directors

Board of directors are not officially public officials so they are not held accountable to those within their district

Board of directors have eminent domain powers

Board of directors may issue bonds with little oversight by the city, county or state

The criteria to creating a TIRZ is too vague, with no oversight or accountability

Solutions:

Pass constitutional amendment requiring all TIRZ be terminated at 10 years.

All bonds, projects and taxes but be finished by the end of the 10th year of operation

Restrict how much of the city can be within a TIF district

If the TIRZ surplus is not spent after 5, it automatically goes back to the general fund

Texas Constitution
Code – Tax Code
Chapter – 311 Tax Increment Financing Act
Section – 311.003 Procedure for Creating Reinvestment Zone
Section – 311.009 Composition of Board of Directors
Section – 311.010 Powers and Duties of Board of Directors
Section – 311.005 Criteria for Reinvestment Zone

Tax Increment Zones (TIRZ) Expansions Designed to Beat Revenue Cap

US PIRG – Tax-Increment Financing: The Need for Increased Transparency and Accountability

Is Tax Increment Financing Racist? The Racially Disparate Impact in Chicago’s TIF Spending

Huntsville City Council votes unanimously to repeal TIRZ No. 1

Sealy’s lone TIRZ may fall short

Kansas city to consider terminating tax increment financing district

North Dakota Supreme Court upholds Bismarck’s tax increment financing plan

Bismarck Radisson Pays N0 to Schools and Parks

U.S. Supreme Court – Back Seizure of Property for Development 5-4

Del Rio TIRZ ordinance repeal to be considered

Midland Downtown revitalization without the TIRZ

Midland Residents Not Happy After City Council Votes to Get Rid Of TIRZ After Next Fiscal Year