TAMPA — Hillsborough County is moving away from a plan to create special taxing districts to pump money into blighted areas such as the neighborhoods around the University of South Florida and Palm River.
County officials realized while studying the idea that the districts would raise too little money in the near term to pay for drainage improvements, sidewalks or other amenities that would make them attractive for redevelopment soon.
So the county is exploring a new idea: dedicating a portion of future property tax growth across the county to spruce up specific areas in need of a facelift. By capturing a portion of taxes all property owners pay, the county hopes to raise more money quickly, an idea commissioners seem to like.
"This seems to be a better choice to have a meaningful impact," County Administrator Mike Merrill said after one of two recent briefings he gave commissioners.
The county had been exploring the idea of creating so-called tax-increment financing districts to fix up areas that never boomed, even during the go-go building years of the early 2000s. Tampa has used this approach to channel money into areas where it's hoping to attract private-sector investment, such as in parts of the Channel District and much of Ybor City.
As it works there, the city designates pockets of blight as redevelopment areas. Once enacted, all or a portion of the property tax growth in that geographic zone can only be spent in the area from which it came. As those areas redevelop, the new taxes they generate can get spent on things like decorative street lighting, sewer line upgrades or pocket parks.
But if those areas don't attract redevelopment, the amount of money raised can add up to a pittance.
"It really takes years before you have any meaningful dollars," said Bonnie Wise, Hillsborough County's chief financial administrator.
Most people's property taxes end up in a general pool of government money that can be spent anywhere else in the community, to pay firefighters, buy sheriff's cars or mow ball fields.
What the county is proposing is a variation of tax-increment financing. It would in effect designate the whole county as a special taxing district. Then a portion of future property tax growth everywhere would be set aside to promote redevelopment in specific areas.
The money comes not from an increase in the tax rate, but by simply skimming a portion of the increase in county tax revenues that results from rising property values and new homes and businesses getting built.
Each year, the amount of money would likely grow as property tax revenues climb. That's because the percentage set aside for redevelopment would be based on tax growth compared to the first year the plan is enacted.
For instance, the county is expected to bring in $366.2 million from the property taxes collected from all Hillsborough residents, including those within its three cities, in 2014. That would be the base year.
If property values overall climb just 4 percent in 2015, and if 15 percent of that increase is set aside, that would raise $2.2 million for redevelopment. By 2019, if values keep rising by 4 percent annually, the same 15 percent portion for redevelopment would be $11.9 million because of the compounding effect of year-over-year increases in property values after 2014. By 2024, it would be $26.4 million.
Of course, that money won't then be available for things such as law enforcement and fire service, running regional parks or giving raises to county employees. At the same time, by not designating specific areas as redevelopment zones, it gives commissioners flexibility in where and how the money can be spent.
Some of them, however, are calling for rules on how the money gets spent.
"I see a tremendous amount of logic to this," Commissioner Victor Crist said at an initial meeting. "I think we still need to identify some priorities."
He elaborated at a second meeting that he doesn't want to see the program turned into one more pool of cash that commissioners fight about each year to pay for pet projects. He wants a process created to vet ideas and set priorities "so that it doesn't create a food-fight here at the dais."
Bill Varian can be reached at [email protected] or (813) 226-3387.