HIGHLANDER POINT: A GATEWAY - Floyd County Indiana

Financing 55Tax Increment Financing (T I F)Tax increment financing is a subsidycreated by State enabling legislation. Theincreased tax revenue from that areaapplied to finance redevelopment withinthe district. It is the responsible of localgovernments to enforce TIF’s.TIF has versatile uses; financing newinfrastructure projects, land acquisition orparceling services, planning andengineering services, and demolition andrehabilitation of buildings. In addition, TIFdistrict can be employed to financeBrownfield redevelopment projectsIndiana state legislation states that onlyareas of blight are eligible for TIF districts.Once the development property isestablished, the property value is frozen,development bonds are issued anddevelopment commences. The differencesin property value (pre TIF and postimprovement) are used to pay for thedevelopment bonds. All redevelopmentplans must conform to the comprehensiveplan, and must specify the type of landcreated by the development.TIF has proven to be beneficial for largerurban areas. Today rural communitieshave begun to implement similar strategiesand projects. In the region, SpencerCounty, Kentucky plans to designate up to500 acres of land as a TIF district forindustrial uses. Spencer County hopes thatthis will help to finance road andinfrastructure improvement in the area toattract businesses for an industrial park.The added businesses in the county willalso help to add to the county’s taxrevenues which are currently mostly fromresidential property taxes (Green, 2006).Special Tax DistrictsAnother form of Tax increment financing(TIF) are special taxing districts. Thegovernment establishes these specialdistricts to fund specific improvementswithin the district. State enabling legislationpermit special tax districts and areadministered by a localgovernment/community entity (Berens etal, 1996).Creation of special tax districts circumventsthe need to tax existing residents forfacilities required for new developmentsand spreads the costs of improvementsover a targeted group of owners for arepayment period of 15 to 20 years((Berens et al, 1996).Impact FeesImpact fees are fees charged to thedeveloper or to a homebuyer to recover theportion of the cost of certain off-siteimprovements or facilities attributed to thesubdivision or lot. Impact fees areallowable under Indiana state law, and maybe imposed by any county, city, townshipor town. They may be exacted on any newreal estate development, residential orcommercial; to mitigate or defray the