Article by George Lefcoe
Local governments undertake economic development projects to pump up the local tax and job rolls, enhance urban infrastructure (street improvements, ball parks, affordable housing), and advance planning norms, such as those favoring increased urban densities to facilitate the use of public transit. To achieve these outcomes, investment capital is raised from the issuance of redevelopment agency bonds to be repaid out of increased property tax receipts from the project itself, as new construction is added to the tax rolls. This method of public finance is called tax increment financing (TIF). “In this way, TIF provides funding for a project without cities having to dig into their current budgets.” The portion of the property tax revenues collected from the project area that would previously have been divided among cities, counties, school districts, and other taxing entities is dedicated entirely to repayment of the redevelopment agency debt.
This Article is about the legal solutions afoot to deal with two controversial aspects of TIF-funded economic development. Economic development has provoked heated public use challenges to local governments taking private property for reconveyance to private firms. Moreover, it has aroused taxpayer protests that some projects accomplish little of public benefit and hog increased property tax revenues that should have been shared with other local government entities.
About the Author
George Lefcoe. Professor of Law, University of Southern California, Gould School of Law. Ervin and Florine Yoder Chair in Real Estate Law. B.A. 1959, Dartmouth College; J.D. 1962, Yale Law School.
Citation
83 Tul. L. Rev. 45 (2008)