Item C - Urban Renewal Amend. - Laserfiche WebLink

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Chapter 9: Fiscal Impact Statement That Estimates the Impact of the Tax Increment Financing, Both Until and After The Indebtedness is Repaid, Upon All Entities Levying Taxes Upon Property in the Urban Renewal Area. Taxing bodies that overlap with the Urban Renewal Agency are affected by the use of tax increment funds to implement the Renewal Plan. When a district is first created, the assessed value within the boundaries is established as the "frozen base". In theory, if urban renewal efforts are successful, the value of the district will grow above the base. That increase is called the "incremental value" or "excess value". Property taxes from the overlapping jurisdictions (schools, general governments, bonds) are then divided between the jurisdictions that continue to receive taxes on the frozen base, and the urban renewal agency that receives taxes on the incremental value. Urban renewal does not directly affect an individual school system's budget because schools are funded by the state on a per-pupil basis. On a state-wide basis, if there are less tax revenues going to schools because of urban renewal districts, then the state provides more general funds to make up the per-pupil funding for all the schools. For other taxing jurisdictions, the share of property taxes from the "excess value" or "incremental value" is not collected by the overlapping jurisdictions during the period of an active district. Urban renewal nominally affects voter-approved local option levies and bonds because the affected district has less property value to levy taxes against, resulting in slightly higher tax rates. The incentive for the overlapping districts to support urban renewal is higher property tax revenues in the long run. When the district is ended, the overlapping taxing districts are able to tax the entire value within the district. Under the theory of urban renewal, this value is higher than it would have been if there had been no district in effect. The estimated amount of urban renewal taxes to be divided over the term of the Renewal Plan (net of discounts, delinquents, etc.) is shown in the following chart. Only the perm- anent tax rates of the overlapping jurisdictions are considered in this analysis because local option levies and bonded debt tax rates will vary from year to year, and may not con- tinue throughout the term of the Renewal Plan. As can be seen, in FY04-05, it is estimat- ed that the City of Eugene would forego about $830,000 of revenue because of the Central Eugene Project Urban Renewal District. In FY29, when the district is terminated, the City of Eugene is estimated to receive $1.9 million of additional tax revenue. Lane County is estimated to forego $150,000 of revenue in the first fiscal year, and to benefit by $340,000 of additional tax revenue when the district is terminated in FY29. The combined school districts are estimated to forego $660,000 of revenue in the first fiscal year, and to benefit by $1.5 million of additional tax revenue when the district is terminated in FY29. As men- tioned above, however, the impact on schools is really an impact on the state's budget because schools are mainly funded on a per-pupil funding formula rather than by the level of property tax dollars generated within their boundaries. 17