Tax Increment Financing as a Value Capture Strategy in Funding Transportation

Zhao, Zhirong Jerry; Das, Kirti; Larson, Kerstin

doi:10.3141/2187-01

Cited by 15 publications

(16 citation statements)

References 10 publications

(9 reference statements)

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“…In the public finance literature, revenue evaluation criteria are used to evaluate mechanisms for generating revenue [41,42]. This evaluation framework has been used to evaluate other revenue generating mechanisms [43,44]. There is little systematic research on the use of SUFs as a funding strategy for stormwater management.…”

Section: The Evaluation Of Stormwater Utility Feesmentioning

confidence: 99%

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Stormwater Utility Fees and Credits: A Funding Strategy for Sustainability

2019

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Lack of stable and dedicated funding has been a primary challenge for municipalities in the United States to implement effective stormwater management programs. Stormwater utility fees (SUFs), as user fees, are an alternative dedicated revenue source to fund stormwater management. When complemented with stormwater utility credits or discounts, SUFs provide greater flexibility to adopting best management practices and reducing stormwater runoff at a lower overall cost to the community. While SUFs have been increasingly used, there is little systematic research on this topic. This paper reviews literature on how SUFs work, discusses the mechanisms for setting the fees, and provides examples of different rate structures from across the U.S. Then, we use the findings of the literature to evaluate SUFs as a funding strategy for stormwater management based on four revenue evaluation criteria of efficiency, equity, revenue adequacy, and feasibility. Overall, the literature indicates that stormwater utility fees are a more efficient and environmentally sustainable source of revenue that allows for long-range planning of capital improvements and operations, but their high political visibility and legal obstacles can affect their effective implementation. However, more empirical research is needed to assess these propositions. There is a lack of literature on effective SUF designs, equitable fee types, the extent to which SUFs lead to change in public behavior and their impact on business and stormwater management investments in a municipality.

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Section: The Evaluation Of Stormwater Utility Feesmentioning

confidence: 99%

“…The equity criterion assesses whether an SUF is considered fair in terms of its allocation of the costs and benefits. This criterion is assessed based on two principles: a benefit-received principle and the ability-to-pay principle [43].…”

Section: Equitymentioning

confidence: 99%

Stormwater Utility Fees and Credits: A Funding Strategy for Sustainability

2019

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“…If the willingness to pay for the access is positive, among oth ers social benefits, it counters the claim that rail investments "almost always waste taxpayer dollars" (O'Toole 2010, p.18). Further, due to inadequate capital funding, tax incremental financing (TIF) has increasingly became a potential funding strat egy for transit investment (Zhao, Das, and Larson 2010). Empirical studies related to value-capturing of transit investment in property prices are able to provide essential evidence for the adoption and implementation of transit finance strate gies (that can also include special assessment, joint development, and other tools, aside from TIF) ).…”

Section: Introductionmentioning

confidence: 99%

The Impact of Hiawatha Light Rail on Commercial and Industrial Property Values in Minneapolis

Ko¹,

Cao²

2013

JPT

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“…Because the TIF revenues are tied with property value increase, TIF is considered a property value capture (VC) mechanism (Mathur & Smith, 2013; Zhao, Vardhan, & Larson, 2010). Other major VC mechanisms in use in the United States include special assessment districts, joint development projects, and impact fees.…”

Section: Introductionmentioning

confidence: 99%

Using Tax Increment Financing to Fund Public Transportation: Enabling Environment and Equity Impacts

Mathur

2016

Public Works Management & Policy

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Through a review of three public transport projects developed across the United States using tax increment financing (TIF) revenues, this article examines the robustness of state- and local-level enabling statutes and the strategies used to minimize TIF’s horizontal and vertical inequities. The article finds that although TIF is widely used to fund transit-related facilities, such as rail lines and train stations, it is not used to purchase or maintain the rolling stock (e.g., train cars and buses). Furthermore, the use of TIF revenues for public transport enhances vertical equity to the extent that public transit users are likely to have lower incomes than auto users. However, in all case study projects, TIF primarily helped develop rail projects, not bus systems, with the latter more likely to be used by lower income people. Finally, setting aside TIF funds for affordable housing, job training, and relocation and rehabilitation can help reduce vertical inequities.

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Tax Increment Financing as a Value Capture Strategy in Funding Transportation

Cited by 15 publications

References 10 publications

Stormwater Utility Fees and Credits: A Funding Strategy for Sustainability

Stormwater Utility Fees and Credits: A Funding Strategy for Sustainability

The Impact of Hiawatha Light Rail on Commercial and Industrial Property Values in Minneapolis

Using Tax Increment Financing to Fund Public Transportation: Enabling Environment and Equity Impacts

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