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<br />spendi~ wc~ld be the m arxl assmirg the tax base growth would have occurred
<br />there anyway. Also state aid to school districte is higher than it w~uld be,
<br />because state aid goes d~n as assessed valuation ir~reases.
<br />
<br />prepared the followirg example to illustrate these impacts..
<br />
<br />The illustration is a hypotheticsl situation, not real numbers for a real
<br />city. First w~ illustrate h~w tax-increment works r~w. ~ we sh~ what the
<br />numbers would be if th~ new growth were made a part of the tax base ar~ direct
<br />levies and aids were used to produce th~ dollars of lm~blic inves~ent. Under
<br />~oth alternatives, oompsre the mill rates for each unit of government, the
<br />dollar levy for development/rede~lcpm~nt, and t~e amcunt of state aid. They
<br />are identic~l, whic~ s~ws the actual distribution of burden ar~ benefit.
<br />
<br />Ex~p. le showir~ use of tax-increment financir~, current law
<br />
<br />A tax-i~a~nt district has been created. Ass,~e, for purposes of this
<br />example, that growth in assessed valuation available for tax-increment
<br />purposes is $5,000,000, which also is known as the ':captured': valuation.
<br />
<br />The dollars of tax le~y, the assessed valuation (exclusive of the
<br />~aluation captured in th~ tax-increment district) for the affected units
<br />of goverr~ent are as follows:
<br />
<br />Unit of Government
<br />
<br />Dollar Tax Levy Assessed Valuation Mill Rate
<br />
<br />School District
<br /> (fGundation levy)
<br />School District
<br /> (other levy)
<br />
<br />Metro Agent%,
<br />
<br />$ 2,250,000 $ 101,000,000 22.277
<br />7,498,000 326, 000, 000 23. 000
<br />
<br /> 7,869,000 326, 000,000 24.138
<br />
<br /> 39, 576,000 1,302,000,000 30.396
<br /> 5,100,000 5,431,000, 000 .939
<br />
<br />100.750
<br />
<br />Urger the provisiors of th~ tax-incr--~nt law, the total mill rate,
<br />100.750 mills, is multiplied by the csptured value in the tax-increment
<br />district, $5,000,000, to arrive at tt~ tax-increment le~y in dollars.
<br />This is the a.r~;~l amcunt available to pay the public'.s development ~r
<br />redevelopment exper~e. The result of multiplying 100.750 mills (also
<br />expressed as 10.0750 percent) by $5,000,000, is $503,750.
<br />
<br />Example showir~ the same iml~ct, but hhrough direct levies ar~ aids
<br />
<br />Step 1--The '.'captured': value of $5,000,000 is added into the assessed value of
<br />every unit of government. The table below shows an increase in assessed value
<br />of $5,000,000 for each unit of government. Expenditures of the units of
<br />government remain the same; therefore, the dollar tax levies are urged
<br />(except for tl~ school district fcundation le~y, which will be explained in the
<br />next l~xagraph.) 'MiLl rates are recalculated to produce the same ~mgunt of
<br />re~es with th~ inclusion of an exported base. The result, of ~o~rse, is
<br />that the mill rates decline because of the growth in ~aluation from addin9 the
<br />$5,000,000.
<br />
<br />The school district four~ation levy increases by $ll5,000, but the mill rate
<br />for t~e school district foundation levy r-m~im undmarged. A provision of
<br />state law requires that the school district levy the same mill rate, 23 mills,
<br />for foundation purposes, irrespective of t~e size of the tax base.
<br />
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