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Tax Increment Financing

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Tax increment financing is a method of reallocating property tax revenues which are produced as a result of an increase in taxable valuation above a "base valuation" figure within a tax increment area. Until the tax increment debt within an area has been repaid, tax revenues produced by property tax levies imposed on the increased taxable valuation by a city, county, school district, area school or any other taxing jurisdiction are all allocated back to the city or county which has established the tax increment area, and must be spent by that jurisdiction for projects within that area. Chapter 403 of the Code of Iowa, the Urban Renewal Law, is the statutory authority for tax increment financing.

Click here to see a PowerPoint presentation from Robert E. Josten of Dorsey & Whitney that explains Tax Increment Financing.

Below is a video of Mark Kistler, Johnson County Auditor’s Office, explaining the effects of Tax Increment Financing (TIF) on Johnson County.  The video is from the February 25th, 2014 Johnson County Budget Hearing for fiscal year 2015.

 


Small Bullet 4Additional TIF Information:
TIF Revenue Diverted
TIF District Sunsets Abobe Icon

 

Debt

Debt is defined as an amount of money borrowed by one party from another. Counties are allowed to finance certain qualified expenses by borrowing the funds and paying off the resulting loans/bonds through the Debt Service fund tax levy. Johnson County uses the Debt Service levy as a means to access the Tax Increment Financing (TIF) areas via property taxation. The TIF will then be contributing to the cost of county government via the Debt Service levy. Without the Debt Service tax, TIF areas would contribute very little towards the cost of our county’s operations, services or projects. Through qualified bank borrowing, Johnson County is able to borrow on a short term with a low interest rate.

Below is a video of Dana Aschenbrenner, Johnson County Finance Administrator, discussing the County’s use of Debt.  The video is from the February 25th, 2014 Johnson County Budget Hearing for fiscal year 2015.

 

Small Bullet 4Additional Debt Information:

JC Debt Schedule