City of Weirton Tax Increment Financing District (TIF)
The City of Weirton established the Tax Increment Financing (TIF) District in November 2004 known as “The City of Weirton Three Springs Drive TIF District No. 1.” The City determined that the District would benefit the City and its residents by facilitating the orderly development and economic stability of the City, that development therein will encourage investing in job-producing, private development and expand the public tax base of the City, that the future improvements will result in the increase in the value of property located in the District and will encourage increased employment and business activity within such area and will serve a public purpose of the city.
The City’s Planning Goals for the TIF District
- To encourage cohesive development within a distinctive, high-quality, mixed-use environment.
- To create a local and regional destination for employment and commerce.
- To optimize the TIF District’s tax base, regional competitive advantage, and identity.
- To introduce a wide range of new and/or enhanced housing opportunities into the market.
- To preserve naturally occurring amenities by concentrating future growth on the site’s most suitable buildable areas.
- To leverage existing infrastructure improvements for opportunities available for redevelopment and new development.
- To promote energy-efficient design.
The TIF District funds are available for infrastructure projects in the redevelopment of the properties located in the City’s TIF District. The projects may consist of roadways, curbs, sidewalks, culverts, water lines, sewer lines, etc. The City of Weirton is now focusing on the extension of Park Drive to the new Pietro Fiorentini development.
Frequently Asked Questions
What is Tax Increment Financing?
Tax Increment Financing, or TIF, is a tool state lawmakers gave local governments to help communities restore their most run-down areas or jump start economically sluggish parts of town. With this tool, financially strapped municipalities can make the improvements they need, such as new roads or new sewers, eliminate blighted buildings, and provide incentives to attract businesses or to help existing businesses expand without tapping into general funds or raising taxes.
Since the federal and state governments have greatly reduced their support for economic development, TIF allows municipalities to accept some of this responsibility without raising local property taxes.
TIFs help local governments attract private development and new businesses. New businesses mean more jobs, more customers, and, in turn, more private investment. TIF designation also helps retain existing businesses that might otherwise find more attractive options elsewhere. The jobs and additional investment — private and public — mean more money for the community. As a result, the TIF area itself improves and property values go up.
Without TIF benefits, a deteriorating area will not improve. Businesses do not sink capital into decaying areas, and most communities cannot afford the needed costly improvements without raising taxes. But in a TIF district, dollars for improvements are generated by businesses — new and old — attracted by the TIF benefits. Specifically, money for infrastructure improvements and other incentives comes from the growth in property tax revenues — the tax increment.
What is a “Tax Increment”?
A tax increment is the difference between the amount of property tax revenue generated before TIF district designation and the amount of property tax revenue generated after TIF designation. Establishment of a TIF does not reduce property tax revenues available to the overlapping taxing bodies. Property taxes collected on properties included in the TIF at the time of its designation continue to be distributed to the school districts, county, community college, and all other affected taxing districts in the same manner as if the TIF did not exist. Only property taxes generated by the incremental increase in the value of these properties after that time are available for use by the TIF.
Why is there a need for Tax Increment Financing?
Tax Increment Financing has proven to be an enduring and widely used economic development tool nationwide. TIFs are more frequently used now than ever because other development tools like Industrial Revenue Bonds and Urban Development and Infrastructure Grants are no longer readily available to local governments.
Billions of dollars in federal and state aid to local governments have been eliminated. At the same time, unfunded federal and state mandates have increased the financial burden on most municipalities. Factor in state-imposed property tax caps, and the funding problems facing local governments make it obvious that local governments are left to do more with less.
TIF offers local governments a way to revitalize their communities by expanding their tax base, offsetting, in part, the federal and state funds that are no longer available to them without imposing increased property taxes on the whole community.
Does TIF result in increased tax rates?
TIF captures increases in tax revenue without any change in tax rates. If property values increase as redevelopment occurs, the municipality will receive increased revenues and utilize those revenues to pay for public improvements without increasing tax rates.
The general tax rate in the scenario above stays the same. Only property taxes resulting from any increase in property values, above and beyond the values in the current year, would be designated for future TIF projects.