I’ve paid off a few mortgages in my life. Watching the amortization schedule speed up toward the end is a wonderful thing. I’ve never had enough money in an account to feel like I need do nothing but watch the interest accumulate, but I know it must feel great. Like being way ahead in a basketball game and watching the clock run down, you only have to stay vertical till the clock runs out.
Here’s a thought, and the message for this article: If time or money mean anything at all, don’t drive through the City of Crestview on Friday afternoon. In fact, if that trip becomes important, pray for an accident and hope they call life flight. That is your only chance.
Counties and cities are seldom in the winner’s circle of those who are financially comfortable. Governments have trouble paying for what they have, not to mention getting what they need but don’t have.
Have you ever wondered what Atlanta would look like without highway 285 or 400? Would the city have developed with the same quality construction as has now happened there? Did Atlanta wait until people built quality homes, commercial interests, malls, and industrial uses to plan, fund, and build those roads? I expect not. Those private investments would not have been possible unless the City had the vision and the courage to invest in its future.
Change will require courage, because any public official who dares talk about taxes, even if we all know that’s part of the job, will be skewered. At the same time, if we are to serve the added population we campaigned for in BRAC, our politicians can’t pretend they don’t hear or see the obvious result.
There is a way to take charge of our fate. I’ve said here before that tax increment financing (TIF) is there for the taking. Here’s how it would work: The county and the city make a joint resolution to identify a TIF area, which will be comprised primarily of land in which development has not occurred because of the lack of infrastructure. In the TIF district, all existing land and buildings will continue to be appraised and taxed annually, exactly as they had been before the resolution. Those taxes go to the county or city, as before.
Neither government loses a dime of current revenue. But at the same time each government says in this resolution that tax revenue from all future improvements or increases in appraisal values in the TIF district are to be captured to be applied to infrastructure. Under the law, the captured tax revenue must be used to fund improvements within the TIF area. Everyone is a winner. An owner within the TIF district will see no difference in his taxes (unless he builds or upgrades his property; in which case his assessed value will increase only by the value of his upgrade). The county and the city have already paid the fixed costs of government and would have only marginal added costs from improvements within the TIF district.
Actually, the tax revenue received would be pledged to pay off a bond issue, the proceeds of which would build roads, drainage improvements, water and sewer, or whatever the construction priorities happen to be. (It is possible that there has never been a better time to do long-term bond financing, because interest rates will never be lower. But even if there were no bond issue, the income source could be used for county match for outside financing.) The magic is this: The county and the city lose nothing. The citizens lose nothing. Their taxes remain the same, except to the extent an owner either builds new construction or has increases in property value as a result of new infrastructure. We all gain better roads and better development within the TIF district.
The rest of us can be like the guy with money in the bank, watching the interest climb. We quickly look like a community that cares enough to act, all without spending a dime from the tax base we have today.
I admit there are those who believe that if we wait long enough, someone else will do it, or pay for it. But Realtors, homebuilders, and the Chambers of Commerce know better. We can do more than just be buffeted by a bad economy. TIF was made for this moment. These areas in the county will eventually develop even if we do nothing. But the quality of development, the pace of development, and our quality of life will be far different if we lead instead of follow.
Mike Chesser is a board certified real estate attorney with Chesser & Barr, P.A.