While the citys use of sales tax revenue through MAPS has gained the most attention over the past decade, the city has also turned to tax increment financing (TIF) as another way to leverage tax dollars into economic development.
By creating a TIF district, the city provides public incentives to developers with the increase in property taxes that a development generates. For example, if a building paying $10,000 in property taxes each year were to generate $25,000 a year after being converted into a hotel, the city might use the additional $15,000 in new property taxes to help the developer construct the hotel or build needed infrastructure in the immediate area.
Its a way of getting a development done that otherwise wouldnt be able to without help, said Brent Bryant, Oklahoma Citys economic development program manager.
Oklahoma City currently has eight TIF districts, which include downtown, the Oklahoma health science center and the boathouse district.
While the city is expanding its use of TIFs, Cathy OConnor, CEO of The Alliance for Economic Development of Oklahoma City, said it still pales in comparison to other cities.
We dont really have as many TIF projects compared to a lot of other cities who have been doing this longer, OConnor said.
Dallas has 30 TIF and public improvement districts, while Austin, Kansas City and St. Louis all have at least twice as many as Oklahoma City.
In Oklahoma City, all TIF projects are reviewed by a TIF advisory group, which is made up of city officials.
We analyze it, and we are pretty hard on them, Bryant said. We are not easy.
The next step is a TIF review committee, which includes representatives from other taxing jurisdictions, including the public school district.
OConnor said the fact that other taxing jurisdictions are a part of the process ensures that everyone is on the same page.
Id say there is a very good relationship with the school and the county, OConnor said. And they see a benefit in indirect properties.
While the TIF development sees the revenue generated from increased property taxes, indirect properties, which include other buildings in the TIF district, push half of the increased taxes to the other taxing jurisdictions.
In downtown alone, Bryant said Oklahoma City Public Schools saw an additional $1.4 million last year, which didnt go against the states taxing formula.
Its a bonus for the schools, Bryant said.