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1999-02-10
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1999-02-10
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12/21/2009 10:31:26 AM
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III. TYPE OF FINANCING <br /> increments are issued when there is a need for initial to ca <br /> A. fonds. Bonds secured by tax incr s p <br /> finance public or private improvements. Typically, the bonds are general obligation bonds <br /> backed by the full faith and credit of the municipality. As long as at least 20% of the debt <br /> service on the bonds is reasonably expected to be paid with tax increments, the bonds may be <br /> issued without election. <br /> B. Pay As You Go. An alternative to bond financing is a "pay as you go" arrangement with the <br /> developer. The developer pays for various TTF- eligible costs initially, and the authority <br /> promises to reimburse the developer from tax increment over time as it is generated. The <br /> developer (rather than an unrelated bondholder) bears the risk that the increments will be <br /> insufficient to repay the costs incurred. <br /> IV. LOCAL GOVERNMENT AID PENALTY <br /> A. Generally. The penalty applies only to districts requested for certification after April 30, 1990. <br /> The penalty is tied to the state school aid formula. When an authority creates a TIF District, <br /> the state calculates how much less the school aids would have been had the captured property <br /> value been available to the school district. That amount is then deducted from the <br /> municipality's local government aid (LGA) and if necessary from the homestead and <br /> agricultural credit aid (HACA). <br /> B. Amount. The LGA/HACA loss varies, but is usually about 30% of the tax increment collected <br /> annually when the maximum penalty applies. Note that the penalty does not change the amount <br /> of increment collected; it changes the amount of state aid the municipality receives. <br /> C. Penalty Recapture. <br /> 1. For districts created between May 1, 1990 and July 31, 1993, the municipality may obtain <br /> reimbursement from the developer for lost aid. <br /> N9WPDATAICENTERV➢TIF1- 11TIFSEM. <br /> Financing Bs' Centerville 5 <br /> Tax Increment a tcs -City oJCe tervat �.� <br />
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