Thursday, October 4, 2007
News Study: Tax-allocated districts work ... very well, actually
Posted by Thomas Wheatley @thomaswheatley on Thu, Oct 4, 2007 at 4:52 PM
Tax-allocation districts, or TADs, are a pretty complex funding strategy for redeveloping blighted areas, and more often than not, they'll make your eyes glaze over. Look at Atlantic Station and Princeton Lakes -- these were financed primarily by TADs. The Beltline, Atlanta's long-term loop of greenspace and transit, is banking on TAD funds to build the ambitious project. According to a new study released by the Livable Communities Coalition, the mechanism works very well -- or at least in a fast-growing metro area like Atlanta.
Here's a good summary of how TADs work by the LCC:
TADs have soared in popularity in recent years because they promise a relatively painless way to pay for public projects needed to lure or enhance private investment, especially in areas that might otherwise not attract such development. Bonds are typically issued to pay for the projects. The bonds are then repaid with property taxes generated by rising real estate values associated with the new development. As soon as the bonds are paid, the new tax revenues revert to cities, counties, and schools.
The study adds numbers to what until now has been a relatively theoretical process of determining how effective these projects are -- basing progress on what we see rather than what we know. For example, it considers the impact of TADs on schools, an issue that has kept Beltline planners from getting their hands on $200 million of TAD money ... (from LCC's release)
For larger school districts, particularly county-wide districts, the financial impact of school district consent to individual TADs and individual redevelopment projects is relatively small in the context of their overall budgets. Over time, school districts could be impacted by the cumulative effects of consenting to multiple TADs and multiple bond issues. In most cases, however, it will take many years, multiple large-scale redevelopment projects, and multiple bond issues to divert even one or two percent of future school district taxes into TAD special funds. For example, the Atlanta Public Schools’ estimated total share of tax increment contributed to TADs represents about 4 percent of current local school tax collections. This 4 percent contribution results from placing more than 9.9% of the city’s tax base in TADs, the issuance of more than $400 million in TAD bonds and the inducement of more than $3 billion in investment since 1998. At the same time, the Atlanta Public Schools has received offsetting tax revenue from more than $8 billion in city-wide digest growth that has occurred outside of TADs over the same period. By comparison, the Fulton and Cobb County school districts currently have less than two tenths of one percent of their respective tax digests inside TADs. In the foreseeable future, it is unlikely that either of these districts will be asked to consent to the number of TADs or quantity of bond issues needed to create a measurable impact on their budgets.
The study finds that there are now 27 TADs in four Georgia cities -- Acworth, Atlanta, East Point and Marietta -- a substantial boom in popularity judging that the first one was established in 1997. These areas encompass more than 18,700 acres, 20,600 tax parcels and almost $1.9 billion in existing base tax digest value. Property values inside TADs increase by an average of more than 14 percent each year.
Atlanta accounts for 92 percent of the total value of TAD bonds in Georgia, an important fact and one to take into account. Before scrapyard owners in Zebulon, Ga., go out and demand City Council form a TAD around the rundown property, said scrapyard owners need to realize that it takes initiative and careful planning by officials to truly reap the benefits of the mechanism.
The study will appear on the LCC's website tomorrow, and it's worth checking out. Poke around the site, too -- it's very accessible and shows some good before and after photos of Atlantic Station.
Comments (1)
Showing 1-1 of 1
like
dislike
Latest in Fresh Loaf
-
Photos: Twenty-four hours (almost) inside Your Dekalb Farmers Market 1
CL photographers alternated shifts touring the massive grocery store
-
A few questions with MondoHomo festival organizer Jesse Morgan
MondoHomo is "sexual, groundbreaking and dancing"
-
Scoutmob: Don't call it a deal site
Scoutmob differentiates itself, scores investors
- More »
More by Author
-
State Rep. Kathy Ashe won't seek another term 5
Longtime intown Dem blames 'polarizing political situation'
-
Mark your calendars: CL to host free panel discussion about transportation tax — and you're invited 35
Officials from Georgia Sierra Club, Beltline, and PR campaign supporting tax to discuss measure
- More »
