Financing Flashcards
Revenue bonds
Municipal bonds that can be used to finance income-producing projects. Bonds are secured by a specified revenue source. They can be issued by any government agency that has a revenue source.
Tax Increment Financing (TIF)
“redevelopment credit card”
Introduced in 1950s. Where the city captures the additional property tax generated by the development that would’ve gone to other taxing jurisdictions or to general revenue raising for the city, but instead it goes to finance the public improvement costs like sts, transit, park, sewer, water, bicycle, pedestrian
Public purpose: redevelopment of blighted areas, construction of low and moderate-income housing, creating employment opportunities, improved tax base; new roads, sidewalks, streetscape, sewers
TIF requirements
50% or more of the real property in proposed TIF district is blighted, in need of rehab or conservation, or suitable and zoned for industrial use; new investment proposed would need to enhance value of the property in the district; government entities would need to find that the development to be financed would not have happened without TIF
TIF Districts
aka revenue allocation district, tax allocation district, tax increment district, tax increment reinvestment zone
tax revenues collected on the increase in equalized assessed value generated by the development is collected by the TIF agency and used to pay off the costs of improving the district
“but for” test
the clause in most TIF statutes that demands that TIF be used only if the anticipated growth in property value at the affected site wouldn’t happen “but for” the availability of the TIF capital
lifetime of a TIF
most TIF districts are designed to last long enough to pay off the bonds that are used to finance improvements (typically 20 to 30 years). though there is a way around it for municipalities: encourage more transparency in process, allow school tax exemptions, negotiated agreements
APA stance on TIFs
place reasonable limits on amount of tax increment that can be totaled by by the project area over a specific period of time
set reasonable performance standards
provide adequate opportunities for other government entities to enjoy the accrued taxes once the bond is paid off or the statutory time period has expired
provide sufficient guarantees and protections for when private properites who receive tax benefits withdraw from participating
Shift Share Analysis
economic performance analysis; Evaluates the strengths and weaknesses of a specific region’s industries. It shows the growth of local employment relative to the nation at large
Examines three components of regional employment growth b/w two periods of time: national growth (share) + industry mix (mix) + regional component (shift) = total change in employment of specfic industry
Economic Base Analysis
Location quotient: ratio of share of one industry in a local area versus the region;
> 1: basic industry (brings money in from outside; export sector)
<1: nonbasic industry (community serving; local/service)
total economy = basic + nonbasic
economic base multiplier
ratio of total number of jobs/number of jobs in basic sector
used to estimate effect of additional dollar of basic activity that is created in the region for an additional dollar of outside money
example: if we grow a sector by this much, what is that gonna do for the economy?
County Business Patterns
data used to determine the location quotient
National share
taking the national employment growth rate and applying to employment in the region
Industry Mix
nationall growth rate for particular sector and applies to local employment then subtract national share
Regional shift
applies to local employment; difference between the sectoral growth in the region and sectoral growth nationally
negative - lagging sector; growth in the local employment is less than the growth nationally
positive - leading sector
Input output analysis
macroeconomic analysis based on interdependencies between economic sectors or industries
used for estimating the impacts of positive or negative economic shocks and analyzing ripple effects throughout the economy
components: intermediate production (production to make other products) + final demand
