School board, city council talk TIF
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A joint meeting of the Huntsville Board of Education and City Council produced more details on how and why the city created its latest Tax Increment Financing district.
Why it matters: A bid to bolster downtown development and ultimately increase tax revenues will also mean a period of stagnant school funding from the area.
How it works: The city's ninth TIF would create a roughly 3,700-acre district covering downtown, where specific infrastructure investments are planned.
- As property values rise, the resulting increase in tax revenue would be used to repay debt issued to fund those improvements. Once that debt is paid off, the higher tax revenue would again flow to normal recipients.
Yes, but: As school board member Andrea Alvarez noted, that means the school systems' share of tax dollars will remain flat in that district for the life of the TIF, potentially 30 years, though the city has historically paid them off much more quickly.
- Of the city's eight previous TIFs, the city has closed six. They've been closed in as little as five years and in as many as 24.
- Shane Davis, city urban and economic development director, showed TIF 9 with a projected 14-year term.
What they're saying: "That's a generation," Alvarez said. "My fifth-grader will be my age by the time some of these TIFs are proposed to be paid off, and is that really an investment in education?"
- Davis said it is, pointing to past TIFs that led to investments from companies like Mazda-Toyota, Amazon and more, which resulted in billions of dollars in new investment and higher tax revenues.
By the numbers: Taxes in the TIF 9 district provide nearly $11 million to city schools each year, Davis said.
- Keeping that flat via the TIF, and projecting a 3% inflation rate, that means the school system would miss out on about $409,000 annually at the outset, or $6.13 million over the 14-year term.
- Following the TIF, the city expects the area to generate about $7.7 million more per year in taxes from the downtown area, nearly $19 million total.
📈 Von Braun Center's growing pains
The marquee project the TIF hopes to fund is a $200 million expansion to the VBC, and the meeting drew out some more details about why the city is placing a premium on the convention center.
- Davis said the recent AUSA symposium had to turn away 70 vendors who wanted a seat because the VBC doesn't have the space.
- District 1 Councilmember and former education board member Michelle Watkins said she knows of one conference that passed over Huntsville altogether due to the lack of breakout spaces at the VBC.
"We have to have that space available at the VBC, but at no time are the schools being slighted, not at all," she said.