Tax Increment Financing
The City of Roseville and the Economic Development Authority (EDA) have utilized tax increment financing since the 1980s to achieve a variety of goals, including: creation or retention of jobs, redevelopment of blighted areas or polluted sites, and construction of affordable housing.
Tax increment is a public financing tool authorized by State law that allows the City/EDA to capture and use most of the increased local property tax revenues created by the value of the new project, within a defined geographic area for a defined period of time to help finance projects. However, in order for the project to utilize tax increment, specific requirements must be satisfied in what is referred to as the “but-for” test: “But for” the use of public assistance the new development/project would not be built.
The City/EDA adopted a policy in 2016 regarding use of this financial tool. Since then, periodic review of the use of this tool and performance of the individual districts created is undergone to ensure tax increment is being implemented appropriately. This is accomplished through preparation of a Management Review & Analysis Tax Increment Financing Districts Plan (also referred to as a TIF Management Plan).
Below are summary points regarding the City’s historical use of TIF:
- The City has created 22 TIF districts since 1982.
- Of 22 created districts, only six are currently active.
- As of 2019, the City’s percentage of tax base in TIF districts was 1.8%, the lowest percentage when comparing Roseville to surrounding communities.
- Overall, the City’s use of TIF has created a 877% increase in taxable market value.
For more information on how TIF works, visit the Minnesota House Research Department’s explainer.