Laserfiche WebLink
capacity is the tax capacity that the property in the district pays taxes <br /> on prior to the development and at the time the tax increment district is <br /> created. The property tax revenue received from applying the local tax <br /> rate to the original net tax capacity continues to be dispersed to all <br /> taxing jurisdictions like any other property over the life of the district. <br /> Captured net tax capacity. The amount of new total net tax capacity is <br /> determined after the private project is completed. The new net tax <br /> capacity comes from the increased market value from the development. <br /> The captured net tax capacity is calculated by subtracting the original <br /> net tax capacity from the new total net tax capacity. The property tax <br /> revenue generated by applying the local tax rate to the captured net tax <br /> capacity goes to the municipality to pay for the costs of tax increment <br /> projects. The city collects tax increment revenues generated from the <br /> total local property tax rate except school districts excess levy referenda. <br /> Formula 1: market value X tax class rate tax capacity <br /> Formula 2: total net tax capacity original net tax capacity <br /> captured net tax capacity <br /> Formula 3: captured net tax capacity X local tax rate tax increment revenue <br /> III. THE TERMINOLOGY RELATED TO TAX INCREMENT FINANCING AND <br /> PLANNING <br /> A. Development district. A development district(s) is the broad area within <br /> which the city plans to use tax increment revenue for specified tax <br /> increment projects. Development districts must be established before the <br /> city can create a tax increment district. The development plan outlines <br /> the overall projects for which the city can spend tax increment revenues. <br /> Falcon Heights. Falcon Heights has two development districts (see map <br /> attachment 1). Development district 1 covers much of the city. It <br /> includes development district 2 within its boundaries so that funds <br /> collected in development district 1 as well as in development district 2 <br /> may be used to fund projects within the community business district. <br /> Development district 2 covers the community business district. Tax <br /> increment revenue collected in development district 2 must be used <br /> within this geographic area. <br /> B. Tax increment financing plan. The tax increment financing plan <br /> specifically identifies how a municipality will use tax increment revenue <br /> 2 <br />