Dells council talks TIF district stance
September 26. 2012 2:15PM
Tax increment financing discussion finished off the Dell Rapids City Council’s meeting Sept. 17, as administrator Justin Weiland urged councilors to settle on a stance on the economic development option.
A TIF district, as it’s more commonly referred, is a method by which businesses use an increment to pay for costs associated with financing new development through bond issuance. South Dakota adopted the method in 1978, and money is used for capital costs, financing costs and property assembly.
“I want to gauge where the planning commission and the city council are regarding this,” Weiland said. “I’m just trying to get an indication of where the council might stand on the issue.”
TIF districts allow for tax dollars paid to go back to paying for property for up to 20 years. Weiland said that a common misconception is that it is a “tax break.”
A TIF district implementation does not raise property tax rates on others. Mayor Scott Fiegen pointed out that the formula that sets the base and the increment of the TIF district essentially doesn’t charge for taxing bodies, such as the school district, for up to 20 years.
Councilor Carrie Testerman said that ignoring the possibility of tax increment financing is a missed opportunity for city business development.
“I think we’re lagging behind in development in certain areas,” she said, “and I think we need to make a move.”
Areas selected as TIF districts are typically those that would otherwise struggle to attract interested parties to bring new business into a city.
The council displayed general support of the notion, but no official motions or actions were taken.