Comment 100688

By kevlahan (registered) | Posted April 28, 2014 at 17:09:58 in reply to Comment 100675

Tax Increment Financing is indeed a revenue tool that doesn't involve any new taxes or fees: it simply allows cities to borrow against projected future growth in the regular municipal property tax revenue due to municipal investment in new infrastructure.

The new infrastructure (e.g. LRT) will generate new property investment that will generate additional tax revenue beyond what the properties are currently generating. And this can be very significant: we recently heard how Blanchard's Jackson St property went from generating over $77,000 in annual taxes to only $7,000 once he demolished the building https://raisethehammer.org/comment/95906... That is just one three-storey building ... the 13 km LRT line is full of vacant lots and one or two storey buildings with plenty of room for densification.

User fees for a service currently provided out of general tax revenues (e.g. the portion of total highway costs borne by general taxes) is not a tax but a fee for a service. It does, however, free up existing tax revenue to be used elsewhere rather than subsidizing the service. A user fee could be termed a tax if the revenues are more than that required to totally cover the cost of providing the service.

Comment edited by kevlahan on 2014-04-28 17:15:35

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