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There has been a lot of information about the City of Elkins' application for a TIF. This letter is an attempt to provide some clarity to the TIF.
What is a TIF?
TIF stands for Tax Increment Financing. The purpose for a TIF is to provide funding for projects that will spur economic development.
Funding for a TIF comes from an increase in property tax. Property tax typically goes to the county.
In a TIF district, the county gets the same amount of tax revenue as when the TIF was established.
Only the potential increase in property tax from any new buildings or business and increased property value, funds the projects.
This TIF application lasts for 30 years.
Will a TIF affect my taxes?
A TIF does not affect anyone's tax rate.
Who determines if there is a TIF?
A TIF must be approved by the local government agency that applies for the TIF. Ultimate authority rests with the West Virginia Development Office in Charleston.
What will the TIF funds be used for?
The city of Elkins outlined five potential projects.
1) Elkins Riverfront Development
2) Recreational Trails
3) Some Streetscape Improvements
4) Railyard Improvements
5) Industrial Park Improvements
All and any projects are voted on individually by City Council, to accept or deny, based on viability and return on investment.
How does the city get the money for these projects?
There are two different types of TIFs. The first is a bond TIF. In this way, bonds are issued to raise money to start projects now. The bonds are paid back with only the increase in property tax within the TIF district.
The second way is a pay as you go TIF. In a pay as you go, the increase in property tax is deposited into a separate account. When enough money is raised to pay for a project, then that project is started and completed.
Is money for the BOE affected?
The Board of Education will not receive less funds due to the TIF.
Does the City need to let the County Commission know?
Yes.
The Inter-Mountain reported that "Kesling said the county commission first learned about the TIF when a resident came to a commission meeting and voiced his concerns."
The county commission has never denied receiving the letter; only that Mr. Kesling said, according to The Inter-Mountain, "It's our ignorance that we didn't fully investigate and understand this TIF in the beginning."
Who has the right to what money?
There have been some mischaracterizations about who has the right to this potential tax money.
To be clear, the state Development Office and the law determine which governmental agency has the right to this tax money.
The Inter-Mountain quoted Mr. Kesling saying that the TIF "is going to stagnate the growth of the county's tax base." We do not believe this is true. We believe as Elkins grows, Beverly will grow, Tygart Valley will grow, and the county will grow.
The TIF allows the Elkins community to make capital improvements, for the purpose of attracting new businesses, without raising tax rates or by making cuts to the City's or County's budget.
If you support the City of Elkins in this process, based on the approval of the State Development Office, please contact the state and let them know.
Lamarr Weese
Elkins