Both the Elizabethton City Council and Carter County Commission have signed off on an Elizabethton TIF District, designed to attract industry and assist with environmental issues in an area, which extends from behind Wal-Mart to property near Cherokee Park.
A TIF district caps the amount of tax revenue — from sales and property — each affected tax jurisdiction receives for a period of time.
Any additional tax revenue generated above the capped amount would be captured for specific purposes set out in a plan that creates a TIF district.
TIF is a valuable economic development tool. Tax Increment Financing Districts have become popular across the nation as a way to lure development to a community. The City Planner’s Office has pushed the incentive as a means to nourish and support development.
Bringing new life to the geographical and historical nexus of the old Bemberg and North American Rayon properties makes sense practically and symbolically. Besides the development that will follow, the economic improvements will help rejuvenate that area such as building streets, sidewalks and utilities.
Initially, TIF districts were used as a mechanism to redevelop blighted or environmentally tainted areas. Many of the properties within TIF districts had a negative value prior to the redevelopment, so they generated little, if any, property tax revenue. To help these properties develop and generate property tax revenue, municipalities borrowed money to generate funds to eliminate the blight or clean the property, thus making the property viable for redevelopment.
TIFs allow local governments to capture taxes from increases in value that occur within the district and use that money to pay for improvements or to issue and pay off bonds. Thus, TIFs do not take funds away from other projects. Nor do they cut into existing tax revenue that is going to schools and other government entities.
Opponents of the TIF district plan say awarding incentives to new businesses is not fair to existing businesses. They say that the TIF district discriminates against existing establishments that have paid millions in sales tax over the years as well as the average taxpayer.
However, there are numerous advantages in economic development for the average citizen:
• Jobs become available.
• Increased tax revenue over time helps fund schools, road repair, fire and police.
• New shopping, dining, and housing possibilities.
A TIF district is a wager that these possibilities will outweigh any potential negative of a TIF district.
In our opinion it’s a pretty safe gamble.
That’s because the area proposed as a TIF district is pretty much barren of tax revenue without development.
The area that will become Watauga River Development Area was destined to be a vacated area for years to come. But through development, it could become the site of a new motel and visitors center, a high class restaurant and shops.
The full impact of such a development district won’t be known for years.
But it seems the TIF district has the potential to grow our city. Economic development benefits us all.
That’s worth the risk.