By DOTTY NIST
“The gist of it is that it is not a tax increase,” Walton County District 5 Commissioner Cindy Meadows said of Tax Increment Financing (TIF) to be considered for south Walton County and along U.S. 331 north of the bay.
At their April 14 regular meeting, county commissioners will take up proposals for such financing aimed at providing revenue to fund various types of infrastructure improvements.
TIF is a tool that local governments in Florida can use to capture incremental increase in ad valorem tax revenues resulting from rising property values. Moneys obtained through such financing are required to be used for specific purposes within the areas from which they are generated.
Walton County Administrator Larry Jones had first brought up the TIF concept as a way to fund sewer and water installation that is expected to be needed in connection with the state’s ongoing four-laning of U.S. 331 in its entirety, and resulting development along the highway. The U.S. 331 TIF would apply to unincorporated areas along the roadway.
Meadows said she later began to think of the potential of Tax Increment Financing in connection with needed funding for infrastructure projects south of the bay. These include crosswalk and roadway improvements, drainage upgrades, and bridge replacements.
Methodology for Tax Increment Financing requires the creation of TIF districts by the local government. If there is a decision to proceed, Walton County would use its Home Rule powers to set up this financing.
Each year, a base year tax, previously calculated by assessed value of properties within a TIF district minus all appropriate exemptions multiplied by the related millage rate, would be deducted from the amount computed by multiplying the county’s millage rate for the fiscal year in question by the current aggregate taxable value for the district. The difference would be the tax increment.
“It’s something you would be paying for anyway,” Meadows said. “Say that you paid $1,000 (in ad valorem taxes) in 2012 and $1,050 in 2014. The $50 that is the increase over the base year goes into a trust account specifically designed and maintained for specific improvements and projects.”
This example would apply if the BCC approves a TIF or TIFs and opts to put 100 percent of the tax increment into the account or accounts. Meadows noted that it is possible to set up a TIF either for all or a portion of the tax increment. Also to be set out with the adoption of a TIF or TIFs would be specific uses for funds derived from this financing.
“This ensures that the increment would be spent in the district in which it is collected,” Meadows said of the procedure.
In October, a study commissioned by the BCC conservatively predicted a 2-percent annual rise in prices for properties in the envisioned TIF districts. Based on that, the study estimated that a south Walton County TIF district would yield approximately $700,000 a year for such projects, while a TIF along the U.S. 331 corridor could yield about $4,275 a year. For purposes of the study, $11.3 million worth of projects had been identified for south Walton County and $29 million worth for the U.S. 331 corridor.
Projects paid for through TIFs could be funded in a “pay-as-you-go” manner as funds become available. This method would generally be used for smaller projects. Another option would be to fund projects through bond issuance, with construction costs financed by the local government over a 30-year period and with TIF revenue used for debt service.
Meadows noted that, while the U.S. 331 TIF district has not been projected to provide a large amount of revenue initially, it may be worthwhile for the BCC to consider setting it up in anticipation of more revenue from the TIF district in future years.
The April 14 BCC meeting is scheduled to begin at 4 p.m. The location is the South Walton Annex.
Informational presentations on the TIF study may be viewed online on the Walton County web site, www.co.walton.fl.us by selecting “Departments,” “Finance,” and then “30 A Tax Increment Financing Project” and/or “331 Tax Increment Financing Project.”
