School Keeps Tax Money
Supreme Court Upholds Financing District Ruling
Posted: February 22, 2013 at 4:25 a.m.
The Arkansas Supreme Court affirmed Thursday money from a property tax increase approved in a school millage election cannot be used by the city for a downtown redevelopment project.
At A Glance
What Is Tax Increment Financing?
Tax-increment financing captures increases in property taxes within a predefined district as a way to pay to remove blight, provide infrastructure and encourage development within the district's boundaries. Typically, bonds are issued to pay for infrastructure improvements. City officials determine a baseline of property values on land and structures within the district. Any tax dollars derived from property value growth beyond the baseline goes to repaying the bonds.
When the project is complete and the bonds are paid, property tax proceeds return to local governments, schools and other taxing entities at their full, increased value.
Source: Staff Report
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