In regard to the lead story in the July 21 Cortez Journal, “City eyes funds for removing blight,” I would just like to suggest the following remedy:
Urban renewal authorities are created by municipalities to redevelop areas within their jurisdiction that are found to contain blight or slum conditions and require public participation to attract redevelopment. An urban renewal project is a public/private partnership. The majority of the funding comes from the private sector; public investment comes from tax increment financing, which is the increased amount of property tax or municipal sales tax revenue collected within the URA after the project begins. This new revenue is generated by the increased property values that result the project. URAs voluntarily file financial information and updates on project progress in standard annual reports.
While the mechanics of urban renewal can be complex, it results in the double benefit of removing blight while improving our economy. State law in Colorado authorizes urban renewal authorities to use TIF for projects that improve blighted areas. TIF allows an authority to issue and repay redevelopment bonds by using the “increment” of increased taxes collected within the TIF district after improvements are made.
Tax increment revenue may be generated from property on sales taxes. For TIF purposes, to determine the increment amount of property tax revenue, the base valuation must first be determined. The base valuation is certified by the county and is equal to the total assessed valuation within the TIF district prior to the approval of the redevelopment plan. As phases of redevelopment are completed, the county reassesses the properties the TIF district. Over time, improvements add to the property tax base. The revenue that is attributed to the growing tax base becomes the incremental revenue that is used by the authority for debt service on the bonds that are used to finance the redevelopment project.
Terrence W. Whelan
Cortez