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..,.-.. ._"'..... --- II d. " d through additional state aid. By contrast, Istnct IS ma e up . dd" 1 , ed by levymg a ItlOna abatement payments are reco\ er d h tire school district. As a property taxes sprea across teen result, abatements of school taxes will almost always ~ause . . . while TIF has very htde school dlstnct ta.xes to mcrease, impact on school district tax rates. R . III o 1 o ., identifiable development success stories? What specific steps For aSdid your city take to make this development happen? If public financial assistance was provided, what tools were used? III. Benefits Althou"h abatement lacks the total economic capacity of TIF, it '" offers some distinct advantages: Legislators, the public and the media need to understand what it really requires to undertake redevelopment and affordable .hOUSing. Until city officials decide they're not going to take it anymore, we will continue to be squeezed by criticism of subsidies, limitations on development tools, and unrealistic development objectives. II Simplicity. The process for the approval and use of al--:ltcment is far less complex than TIE . Collaboration. \Vith separate approval authority, the use if abatements encourages collaboration. It requires cities, counties and school districts [() jointly consider implications of the development project. -- . No April Fool fThe gradual sunset of pre-1979 TIF districts from taxes ~' payable 2001 to 2009 will have a signficant impact upon wlCcities' tax base and budgets. A few of the more subtle issues vatrevolving around the decertification of pre-1979 districts Befnclude: de'Most bond counsels have determined that cities without an<speciallegislation must spend the cash balances in the pre- ass1979 districts by April 1, 2001. wo th\:::ities with pre-1990 debt outstanding after April 1 , 2001, will p .need to decide if they will defease debt with all revenues dnreceived in 2001 or send tax increment back on an annual e\ . baSIs. ECI ~l~ecause commercial value in pre-1979 districts is not counted I 1n fiscal disparities contribution ratios, the amount of new tax m'base for a metropolitan city will not be $1 for $1 upon full or partial decertification. Rc SCtall us for any clarification on these issues. cel by III Uses. Abatement fits with projects not well suited to TIE . . Suggestions The interest in al:-atcments is groll"jng as more business owners and de\'e1lJpcrs become aware of abatements. What should you do if you arc approached with a request for an abatement? Here are some l'asic suggestions: II Develop a general business subsidy policy, establishing Purl"'sc, for which your organization may and may not con,iJer granting financi:ll illcenti\'cs to businesses II . . Develop specific criteria and policies for approval of abatements. Remember, tax abatement is a limited resource. It i< imj'<'rt:mt to consider if ;md how you will provide this assistance. Does the project meet a "but for" test? Can the abatement be targeted to achieve specific types of benefits to th,: cl1mmunity! Should the use be designed to meet other ~! :::d:uds? Setting policies and criteria allows you to make h.,t lISC of this tool. avoid setting unwanted precedents for (uture rl..'quc5ts and provide consistent criteria against which to evaluate requests. . . . . . Full). analy:e the impact of the proposed abatement on propertY laXe5. 1be impact on school property taxes is esped.1l1)o complex. School abatements are likely to increase taxes for other caxpayers. Your board or council should receivec:omplcteinfonnation before taking an action which "ill a&ea p~caxes. :l';:;$ Insist ~,. dc,~~t agreement which clearly defines the~thc property owners receiving aha ",. . If your TIF District was certified in: . 1997 - Have you complied with the three- year activity rule? II 1996 - The knock-down provisions apply after four years from the date of certification. . . 1995 - The five-year limit on expenditures applies after five years from the date of certification. . . . 3