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Council hears presentation on proposed TIF District 2; school district and residents raise concerns about EAV impacts
Summary
Consultant Jared of Moran presented a preliminary plan for a proposed TIF District 2, explaining how TIF revenue is generated and used and the need for contiguous parcels and annexations. School-district representatives and a retired state education official warned including existing residential properties could ‘freeze’ equalized assessed valuation and harm school revenue, and asked for carve-outs and detailed EAV analysis.
Jared, a consultant from Moran, presented a preliminary overview of a proposed Tax Increment Financing (TIF) District 2 to the Birmingham City Council on July 28, describing how TIF redirects taxes on increased assessed value into a redevelopment fund for up to 23 years and outlining eligible uses such as infrastructure, utility improvements and building rehabilitation.
Jared explained that TIF is not a property tax increase and does not change existing tax rates; rather, taxes on the base assessed value continue to go to taxing bodies while taxes on growth (the increment) are directed into the TIF fund. He said parcels must be contiguous and that some desired parcels lie outside city limits, meaning annexations may be necessary to include them in the proposed boundary. Jared also noted the process will require an eligibility study, mailed notices, public hearings and coordination with taxing bodies and the school district.
Public comment at the meeting included an appeal from a school-district representative and extended remarks from Carl Owen, a retired State Board of Education school-finance official. Owen urged the council not to include existing residential or developed business areas in the TIF boundary because doing so would freeze the equalized assessed valuation (EAV) of those properties for the TIF term and could deprive the school district of revenue growth for up to two decades. He also asked council staff to calculate the current EAV of the proposed area, segregate residential and business EAVs, and consider carve-outs or compensation for the district.
Jared acknowledged the concerns and said the planning team had been careful to avoid taking parcels that currently generate significant TIF revenue from TIF 1; he said some properties shifted between TIFs would produce only small annual revenue ("less than a $1,000 annually" in one example), that the map was still being refined and that the city would meet with the school district as part of next steps.
Next steps: Jared said the city will complete an eligibility study, file required notices, and hold public hearings once boundary and annexation issues are resolved; he recommended meeting with the school district and refining the proposed map before formally initiating the statutory process.
