Vicksburg will seek more tax revenue with expanded TIFs|[01/11/07]
Published 12:00 am Thursday, January 11, 2007
Among items the City of Vicksburg will seek in this year’s state legislative session is the ability to create more tax revenue by expanding districts of development around projects financed by Tax Increment Financing.
Officials formalized their package of requests Wednesday. The Legislature is in session until the end of March.
TIF is used as a tool to attract commercial developments. Instead of paying higher property taxes that result from higher values on developed property into a community’s general fund, the revenue is pledged to repay the cost of site improvements, usually roads or drainage, over a fixed period.
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City Attorney Nancy Thomas said the city would be able to consider developments built near projects financed by TIFs to be part of the TIF taxing district, using the hotel and restaurant development around the former Kmart site on Pemberton Square Boulevard as an example.
Work to ready the 7.5-acre site, purchased last month by a subsidiary of Kroger Co. supermarket chain, was financed by $275,000 in TIF bonds to help pay for infrastructure.
About $119,000 in principal and accrued interest on the bond payments to the city on the former Kmart property remain outstanding. The payments began in 1991 and go through 2011.
Originally, Thomas said, the city mulled asking the local delegation to pass legislation allowing the city to have the agreed-upon tax rate frozen. Thomas and Strategic Planner Paul Rogers changed their minds, she said, because of federal tax laws and because the tax-exempt status of the bonds would be affected.
Despite the arbitrary nature of determining what types of new development are spurred by developments that happen to be financed by TIF, Mayor Laurence Leyens was enthusiastic about supporting it, along with South Ward Alderman Sid Beauman.
“We’ve just scratched the surface. I’d like to do more TIF bonds,” Leyens said.
North Ward Alderman Michael Mayfield initially refused to second the motion to include the item on the legislative wish list, but still endorsed paperwork mentioning its inclusion.
“You didn’t vote for it, but you signed it?” Leyens asked.
Mayfield eventually voted yes, but said he didn’t see the value in asking the Legislature for such permission, adding the city would “still be stuck” with developments for which it could not collect the full complement of property taxes.
The city also gave its blessing to four other items in formalizing its request: