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Different States, Different Strokes Like nearh• all redevelopment or planning programs. tax increment financing is a creature of state enabling legislation. At lastcount, 28 states permitted T1F in their local communities. Some laws, such as California's, re- quired a state constitutional amendment. Other states either amended their urban renewal laK•s or enacted original TIF statutes. There are several key differences among states in regard to TIF procedures, financing, and planning limitations. Following are a few of those approaches.. California. Blightalone is an insufficient reason to justify TIF designation in California. According to state legislation, the 'blight" in a proposed district must create a burden on the community that could not and K•ould not be remedied by the private sector. Illinois. Unlike many state TIF laws, the Illinois statutes require a city to prepare a plan for the area that is being redeveloped. Also, the TiF designation is not. limited to blighted areas.. "Conservation areas"-those which may become blighted in the future-also qualify. Kansas. TIF designation in Kansas only can be used for commercial redevelopment projects, and not for in- dustrial renewal. Maine. The state's TIF law requires an advisory board for each separate development district, and re- gcires that at least half of the board members be residents or property owners from either the district or an adjacent neighborhood. ~'~1inresota. Extensive guidelines are required for a TIF plan, .including: a needs statement; relevant real estate data; procedures for clearing, improving, and marketing a site; and a disclosure of-the project costs. Planning commission review is also mandated, prior to the plan's submission to the city council. South Dakota. The state's enabling legislation ex- empts school districts from the tax increment process by requiring that all calculated tax increments be returned to the school districts. Texas. One-quarter of each T1F district in Texas must meet a special definition for blight, and the TIF fund must expire no later than 15 years after its inception.. ' 1't'isconsin. Because the state of V~~isconsin compen- sates the school districts affected by TIF designation, it is heavily im•olved in the TIF process. The state's department. of revenue, rather than local government, calculates the tax. incremental base. The purpose of the state's calculation is to remove any temptation from the local authorities to adjust TIF districts and properties in order to increase project re~•enues. Greg Longhini plan will probably be the most. detailed, site- specific plan ever made for your district. It should be prepared by competent professionals and be laced with. a heavy dose of .realistic project proposals. 6. Establishment of a "tax-base year." Revenues resulting from any future increases above this base will flow into .the redevelopment trust fund. Careful attention to statutory deadlines can sometimes advance your base year by one year, which can be an important running start. ~. Solicitation of developers, and a conclusion to all. disposition and development agreements. A disposition and development agreement obligates the developer to construct specified improvements in a given time period. In return, the agency assemblesand prepares the site, conveying it to the _ developer for a set price. The agency also may agree to other improvements, such as nearby park- ingfacilities. If the owner of the property is to make the improvements in return for agency-sponsored improvements in the area. then it ~,•ould be knot+>n as an owner-participation agreement. 8. Issuance of bonds by the redevelopment agency, in order to fund assembly of the site or specified public improvements. TIF bonds, ~~•hich are tax ex- empt, are secured by the future proceeds of the trust fund. However, they generally do not involve a full faith and credit obligation by the cit}•, nor do they constitute an indertedress ~~•ithin the mean- ing of statutory debt limitations. There is some variation among states; for instance, in Florida, TIF bonds do not require a referendum. ' 9. Implementation of all improvements agreed to in the disposition and development agreement. By carefully selecting both the developers and the leadership of the agency in the first place, this step,.. can be carried out in a timely fashion. 10. An increase in the assessed value of property will result from the various site improvements which - aremade, thus producing tax revenue for the trust'- fund. Because all the increases after the base year are allocated to the trust fund, the fund will also capture the increased revenues which are at- tributable to any general improvements or infla- tion. This windfall may permit an accelerated retirement of the debt or, in some cases, may be returned to .the local government's general treasury. 11. Trust fund revenues are used to retire bonds. Once all the outstanding debt is eliminated, the trust fund also may be retired-usually about 20 years after the program begins. Local government then becomes the sole beneficiary of the annual tax increment. tti'hat Are the Consequences If I Do It? One of the biggest misconceptions about tax increment financing is that it really means tax abatement, .and that certain businesses and individuals will have their taxes reduced. It's too bad we can't just turn back. the clock and call tax increment financing something else-perhaps 3