The Redevelopment Agency uses a funding mechanism
called "tax increment financing". On the date the Redevelopment
Agency Advisory Board approves a redevelopment plan, the property within the
boundaries of the plan has a certain total property tax value. If this total
assessed valuation increases through property improvements or new development,
the increase goes to the Redevelopment Agency to be reinvested in the
redevelopment area where it was generated. This increase is called "tax
increment". Usually, the flow of tax increment revenues to the Agency are
not sufficient to finance the full scope of redevelopment activities and
development projects. Therefore, agencies may issue bonds, a debt
instrument used to increase capital available. These bonds are not a liability of
the City or County and are repaid solely from tax increment revenues. Tax
increment is generally used in the same project area where they were
generated. One exception is that as soon as the city's population reaches 500,000,
18% of the increment in all redevelopment areas goes toward affordable
housing projects throughout the city and public education in or
within one mile of a redevelopment area. Currently, the Downtown and
Eastside Redevelopment areas already set-aside 18% of revenues for public
education due to extending the area life (Downtown) and resetting the base year
(Eastside).
(FAQ3747)
