Using Tax Increment Financing RSA 162K
What is TIF? <ul><li>A powerful tool for funding necessary infrastructure improvements. </li></ul><ul><li>Using a portion ...
Development Districts & TIF Plans <ul><li>The Development District should include the area where public improvements are n...
What Can TIF Be Used For?  <ul><li>All activities undertaken must be consistent with the Development Plan, and can include...
Bond or Pay-as-you-go <ul><li>TIF revenue is set aside to either  </li></ul><ul><ul><li>a) pay a bond issued by the City f...
How Does TIF Work? <ul><li>A district is created with boundaries that include areas where public improvements are needed, ...
Example <ul><li>Have some confidence of development or redevelopment </li></ul><ul><li>Have identified public infrastructu...
Example <ul><li>The inventory of the district shows a combined assessment for taxes of $2 million, producing $40,500 in ta...
What To Do Next? <ul><li>Review RSA 162-K and amendments  </li></ul><ul><li>Hold a public hearing at least 15 days before ...
To Establish a TIF District <ul><li>Define and map the TIF District </li></ul><ul><li>Appoint TIF Advisory Board and Distr...
RSA 79e – Downtown Tax Relief <ul><li>Identify eligible Districts & properties </li></ul><ul><li>Approved by Rochester Cit...
Tax Credit Programs <ul><li>Federal  </li></ul><ul><ul><li>New Markets Tax Credits  </li></ul></ul><ul><ul><li>R&D Tax Cre...
Local Programs & Incentives <ul><li>JOB Loan Program </li></ul><ul><li>Sign & Façade Grant Program </li></ul><ul><li>RIDA ...
A Final Thought <ul><ul><li>“ They always say time changes things, but you actually have to change them yourself.” </li></...
Other Economic Development Topics Not Covered <ul><li>Technology </li></ul><ul><ul><li>Impact on ALL industries </li></ul>...
Stay in Touch <ul><li>www.thinkrochester.biz </li></ul><ul><li>Facebook, Twitter, LinkedIn </li></ul><ul><li>Slideshare </...
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Rochester NH Incentives TIF- 79 E Taxcredits

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Quick overview of Rochester NH Incentives for business relocation or expansion for Leadership Rochester Nov 2009.

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Rochester NH Incentives TIF- 79 E Taxcredits

  1. 1. Using Tax Increment Financing RSA 162K
  2. 2. What is TIF? <ul><li>A powerful tool for funding necessary infrastructure improvements. </li></ul><ul><li>Using a portion of new taxes created by new construction, expansion or renovation of property within a defined district to make public improvements. </li></ul><ul><li>The City Council is in control of how TIF dollars are spent. An Advisory Board insures that the TIF Plan is implemented. </li></ul>
  3. 3. Development Districts & TIF Plans <ul><li>The Development District should include the area where public improvements are needed, and sites that are likely to generate new tax revenue. </li></ul><ul><li>District boundaries can be adjusted after creation if necessary to include new infrastructure or development. </li></ul><ul><li>An official plan must be developed by the TIF Advisory Board, and approved by the City Council, outlining how TIF revenue is to be spent. </li></ul><ul><li>Each year the municipality can review it’s financial situation and decide how to distribute the incremental revenues. </li></ul>
  4. 4. What Can TIF Be Used For? <ul><li>All activities undertaken must be consistent with the Development Plan, and can include, but are not limited to: </li></ul><ul><ul><li>Acquire land or easements </li></ul></ul><ul><ul><li>Build or improve roads, bridges and transportation systems linking commercial areas, or to meet the goals of the development plan </li></ul></ul><ul><ul><li>Extend or improve water, sewer, utilities to the development district </li></ul></ul><ul><ul><li>Install lighting, street signs, landscaping, and/or pedestrian ways </li></ul></ul><ul><ul><li>Construct parking structures, plazas, or other traffic and parking control features </li></ul></ul><ul><ul><li>Planning or engineering for public improvements or projects. </li></ul></ul>
  5. 5. Bond or Pay-as-you-go <ul><li>TIF revenue is set aside to either </li></ul><ul><ul><li>a) pay a bond issued by the City for improvements in the TIF District, or </li></ul></ul><ul><ul><li>b) complete the improvements in the development plan in phases, or </li></ul></ul><ul><ul><li>c) be saved until sufficient annual increment is available to support a bond for the entire project. </li></ul></ul><ul><li>Bonds issued in this manner do not count against a City’s debt capacity. </li></ul><ul><li>Bonds with a dedicated revenue source will not raise the tax rate in the manner that GO Bonds will. </li></ul>
  6. 6. How Does TIF Work? <ul><li>A district is created with boundaries that include areas where public improvements are needed, in addition to areas where new development or redevelopment is likely to take place. </li></ul><ul><li>An inventory of the properties is done, establishing the base value of the district. Taxes on the base value continue to get distributed in the usual way. </li></ul><ul><li>As properties in the district are developed or redeveloped there, there may be an increase in the taxable value. The difference between the base and the new value is the increment. </li></ul><ul><li>A portion of the taxes from the new incremental value are dedicated for use within the TIF district and/or to pay the bond, rather than the usual distribution. </li></ul><ul><li>If needed, the City Council may reallocate portion of the revenues back to the general fund. </li></ul>
  7. 7. Example <ul><li>Have some confidence of development or redevelopment </li></ul><ul><li>Have identified public infrastructure needs in the same area </li></ul><ul><li>Could use TIF instead of City GO bonds to accomplish goals </li></ul>
  8. 8. Example <ul><li>The inventory of the district shows a combined assessment for taxes of $2 million, producing $40,500 in tax revenue annually (@ $20.25 per $1,000 value) </li></ul><ul><li>After development, the properties in the district have an assessed value of $10 million, producing $40,500 for the general fund and $162,000 in TIF revenue. </li></ul><ul><li>Can be affected by- </li></ul><ul><ul><li>Changes in assessment </li></ul></ul><ul><ul><li>Changes in tax rate </li></ul></ul><ul><ul><li>The value of new development projects </li></ul></ul>
  9. 9. What To Do Next? <ul><li>Review RSA 162-K and amendments </li></ul><ul><li>Hold a public hearing at least 15 days before a vote, with appropriate notifications </li></ul><ul><li>Get input from schools, County, Elected Officials, Chamber of Commerce, Rotary, Planning Board, other stakeholders </li></ul><ul><li>City Council adoption </li></ul>
  10. 10. To Establish a TIF District <ul><li>Define and map the TIF District </li></ul><ul><li>Appoint TIF Advisory Board and District Administrator </li></ul><ul><li>Define public and infrastructure improvements </li></ul><ul><li>Prepare spreadsheet for tax assessment and potential tax increment revenues of proposed district </li></ul><ul><li>Prepare cost benefit analysis of public improvements </li></ul><ul><li>Draft time schedule of TIF District Development </li></ul><ul><li>Refine and revisit City Council </li></ul><ul><li>Hold a Public Hearing </li></ul><ul><li>City Council vote to establish district and approve development plan – Approved in Dec. 2005 </li></ul>
  11. 11. RSA 79e – Downtown Tax Relief <ul><li>Identify eligible Districts & properties </li></ul><ul><li>Approved by Rochester City Council in 2007 </li></ul><ul><li>Develop a review & approval process </li></ul><ul><li>Have had 2 projects approved for tax relief </li></ul><ul><ul><li>The Castle on Charles Street </li></ul></ul><ul><ul><li>Scenic Theater on North Main St. </li></ul></ul><ul><li>Intent is to offer an incentive for property owners to invest in Downtown properties </li></ul><ul><ul><li>Offset increased property tax </li></ul></ul><ul><ul><li>Extra incentives for housing & affordability </li></ul></ul><ul><ul><li>Actual assessed values may not match investment profile </li></ul></ul><ul><li>Public Benefit </li></ul>
  12. 12. Tax Credit Programs <ul><li>Federal </li></ul><ul><ul><li>New Markets Tax Credits </li></ul></ul><ul><ul><li>R&D Tax Credits </li></ul></ul><ul><ul><li>Historic Revitalization </li></ul></ul><ul><ul><li>ARRA Revitalization Zone </li></ul></ul><ul><ul><li>Renewable Energy </li></ul></ul><ul><li>New Hampshire </li></ul><ul><ul><li>Revitalization Zone Tax Credits – (CROP Zone) </li></ul></ul><ul><ul><li>R&D Tax Credit </li></ul></ul><ul><ul><li>No broad base personal income tax </li></ul></ul><ul><ul><li>No sales tax </li></ul></ul><ul><ul><li>No use tax </li></ul></ul><ul><ul><li>No inventory tax </li></ul></ul><ul><ul><li>No capital gains tax </li></ul></ul><ul><ul><li>No professional service tax </li></ul></ul><ul><ul><li>Low Corporate income tax </li></ul></ul>
  13. 13. Local Programs & Incentives <ul><li>JOB Loan Program </li></ul><ul><li>Sign & Façade Grant Program </li></ul><ul><li>RIDA - Bonding or Loan Guarantees through BFA-CDFA </li></ul><ul><li>SBA Lenders - Guarantees </li></ul><ul><li>CDBG - Grants </li></ul><ul><li>Job Training Grants up to $20,000 </li></ul><ul><li>Energy Efficiency Loans – Ocean Bank </li></ul><ul><li>SEDC – Revolving Loan Fund & more </li></ul><ul><li>Angels & Venture </li></ul>
  14. 14. A Final Thought <ul><ul><li>“ They always say time changes things, but you actually have to change them yourself.” </li></ul></ul><ul><ul><ul><ul><li>Andy Warhol </li></ul></ul></ul></ul>
  15. 15. Other Economic Development Topics Not Covered <ul><li>Technology </li></ul><ul><ul><li>Impact on ALL industries </li></ul></ul><ul><li>ED Marketing tools </li></ul><ul><li>Data-driven Development </li></ul><ul><ul><li>Psychographic market analysis </li></ul></ul><ul><ul><li>GIS Planning </li></ul></ul><ul><li>Program & organization administration </li></ul><ul><ul><li>Benchmarking </li></ul></ul><ul><li>Funding ED Programs </li></ul><ul><li>Workforce development </li></ul><ul><ul><li>Training incumbent workers </li></ul></ul><ul><ul><li>Workplace skills for youth </li></ul></ul><ul><li>Youth retention </li></ul><ul><li>Significant shortages </li></ul><ul><li>Workplace Productivity </li></ul><ul><li>“ Green” Jobs & Industries </li></ul><ul><li>What is the Future of Economic Development? </li></ul>
  16. 16. Stay in Touch <ul><li>www.thinkrochester.biz </li></ul><ul><li>Facebook, Twitter, LinkedIn </li></ul><ul><li>Slideshare </li></ul><ul><li>[email_address] </li></ul><ul><li>Rochester Economic Development Commission December 10 th </li></ul>

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