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"TIF 101" for Cincinnati- 12-8-19

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This presentation was delivered by Mark Samaan at the public forum on public education and TIFs hosted by the Cincinnati Federation of Teachers and the Cincinnati Education Justice Coalition on December 8, 2019.

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"TIF 101" for Cincinnati- 12-8-19

  1. 1. December 8, 2019 Mark Samaan “TIF 101 – The TIFs of Cincinnati”
  2. 2. 2 What are TIFs?
  3. 3. 3 What are TIFs? • Municipality Creates (ORC #5709.40 - #5709.73 - #5709.78) • Designed to subsidize improvements in “blighted” areas • Captures “incremental” property taxes ABOVE base value •Around since 1980’s for individual projects - usually one site • In 2002, Ohio allowed creation of ‘District TIFs’ • Can last up to 30 years • PILOT provision for schools if exceeds 10 years
  4. 4. 4 What are TIFs? •Municipality creates TIF for 1 site or a district up to 300 acres •Existing property taxes paid in the TIF are frozen at base year amounts •As property values in the TIF rise over the years due to new construction and reassessment, the revenue that would have been paid to general tax levies is diverted to a TIF Account •TIF Revenue can be spent on improvements to public infrastructure and private development - hard costs only •Due to agreement between Cincinnati and CPS, 25% or 27% of the amount diverted is paid to CPS as a PILOT
  5. 5. 5 What are TIFs? 416 Parcels in Walnut Hills TIF $53.5M in Base Value - the district value in 2002 $33.7M in TIF Value - 63% increase in values as of 2018 General taxes are only collected on the 2002 Base Value - until 2032 The TIF Value is diverted to the TIF Account - until 2032
  6. 6. 6 How Do TIFs Work? After that, all property tax increases above the base are channeled to the TIF district The property taxes collected from properties inside the district BEFORE the district was created that go to units of government stays FLAT for the life of the TIF Tax on $53.5M 30 years Tax on $33.7M
  7. 7. 7 How Do TIFs Work? THIS MONEY GOES TO CITY HALL IT IS “OFF THE BOOKS” IT IS NOT INCLUDED IN THE NORMAL BUDGETING PROCESS THIS MONEY IS USED FOR UNITS OF LOCAL GOVERNMENT. IT IS “ON THE BOOKS” 30 years Tax on $53.5M Tax on $33.7M
  8. 8. 8 Money From TIFs Taken From? $53.5M in Base Value ~$1.5M in Property Tax 30 years
  9. 9. 9 Money From TIFs Taken From? 30 years $33.7M in TIF Value ~$640k in TIF Diversion in 2018 alone in Walnut Hills 2141 Gilbert Avenue 2018 Market Value: $2.14M 2002 Base Value: $0.01M 2018 TIF Value: $2.13M
  10. 10. Actual Half-Year Tax Bill for 2141 Gilbert Ave TIF Revenue hidden in here
  11. 11. 11 What are TIFs?
  12. 12. 12 What are TIFs?
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  14. 14. 14 • Supposedly before any TIF funds are appropriated, the City consults with the community council/business association of the TIF District • Promises made to spend money on public improvements and on spurring ‘development’ after community engagement • In reality, most TIF spending is approved via ‘emergency’ ordinance in large batches with little debate • TIF spending usually provides public funds to private development
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  17. 17. How much is the TIF Budget? Have you ever heard that number? How much do our TIFs generate? What is the account balance of each TIF? A Few Questions...
  18. 18. 18 Where are TIFs?
  19. 19. 19 $29.6 Million Diverted
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  23. 23. ● TIFs = Property Taxes ● Increment $ Diverted by TIF ● Run Outside of Normal Budget ● Lasts Up to 30 Years ● Blight Conditions ● Can Be Used for Private Owners To Sum Up...
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  25. 25. 26 2018 Market Value: $243.1M 2018 TIF Value: $241M 2003 Base Value: 2.1M $4.7M Diverted in 2018 $1.2M PILOT paid to CPS -$850K Net Loss by CPS -$2.5M Net Loss by All Other Levies
  26. 26. 27 $1.4B in 2018 Market Value $754M in 2002 Base Value $630M in 2018 TIF Value +83.5% in Value Increase TIF Value not taxed for general levies Downtown & Over-the-Rhine TIFs Not Included in These TIFs: Great American Tower 84.51 Building - 5th/Race Paul Brown Stadium
  27. 27. 21c Hotel
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  29. 29. 30 On the horizon…
  30. 30. 31 On the horizon…
  31. 31. 32 In Closing…

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