Tax Increment Financing, Projects, and Project Areas
The primary tool delegated to community development and renewal agencies, including the Redevelopment Agency of Provo City, under Title 17C, is the power to use tax increment financing (TIF) to promote redevelopment and economic development at selected locations in the City. After designating specific project areas and adopting project area plans for these areas, the Redevelopment Agency may elect to commit property tax increment, i.e., the increase in property tax revenues associated with new development in the project area, to help with extraordinary costs of bringing about the new development, for a period of time. (In certain cases, sales tax increment may also be employed.) Such establishment of new project areas and commitment of this future growth in tax revenues brought on by new development takes place in cooperation with the affected taxing entities, i.e., Utah County, the Provo City School District, the Central Utah Water Conservancy District, and Provo City.
TIF is not the imposition of a new or increased tax in a project area. It is merely a way of temporarily diverting the net increase in tax revenue generated by new development in order to help cover some of the cost of the new development. The point of this is to enable development to occur, or improve the quality of the development which occurs, in ways which would not be possible without the infusion of tax increment cash for a period of time. TIF is intended to fill a gap in the financing of new development so that the development may proceed.