Update on Tax Increment Financing Process
Last modified on January 23rd, 2023 at 01:28 pm
Earlier this month, council voted to make application to the West Virginia Department of Economic Development for authority to form a Tax Increment Financing (TIF) district in Elkins. (See map at bottom of post.)
TIF is a mechanism created in state law to help cities and counties pay for needed projects when other financing is not available. At the heart of TIF is the concept of reserving future increases in property tax revenues for local use, while avoiding the need to increase property-tax rates. (Read more about TIF here.)
Applying for creation of the TIF district is the only step taken by council to date. Although the application requires enumerating possible projects that may be undertaken, the list of possible projects is amendable. The only projects that may be funded by TIF are those for which no other source of funding can be identified. (Click here for information about potential projects for redeveloping downtown Elkins.)
TIF funds may be accessed by issuing municipal bonds or through a process called pay-as-you-go. Issuing bonds would require separate council approval, along with justification of financial need and anticipated revenue collection.
Next steps in the TIF process:
- The city’s application is being reviewed by WVDED. The city should hear a response by sometime in March.
- If the application proposing to create a TIF district is approved, the city must then approve an ordinance doing so. It is currently estimated that such an ordinance could be finally approved by early April.
- Yet to come: decision about whether to issue bonds or use pay-as-you-go method, and how to most effectively apply revenues to the identified projects.