Calling all economic developers: Large TIFs may be eligible for a one-time extension opportunity
In the fall of 2019, the Ohio General Assembly significantly changed state law governing tax increment financing (TIF) exemptions. For certain TIF projects, local communities can extend the exemptions – and, therefore, continue to redirect property tax millage to necessary public infrastructure improvements – up to 30 additional years.
Long used as a go-to project financing tool by Ohio’s local economic development practitioners, TIF allows communities to offset the costs of needed public infrastructure improvements with service payments in-lieu of taxes. Because TIF is frequently used in Ohio, the General Assembly sees fit to make changes to the law on a regular basis. Often, such changes interest only those who are fixated on details buried in Ohio’s economic development laws. But this most recent change is noteworthy to a wider audience.
The TIF law change, which is found in new Section 5709.51 of the Ohio Revised Code, allows municipalities, townships and counties a one-time opportunity to amend their TIF ordinances by extending exemptions for up to another 30 years. The law change only allows such extensions in large development projects. Urban redevelopment TIFs and parcel TIFs created by municipalities, townships and counties, for which service payments in-lieu of taxes were paid in excess of $1.5 million during 2019, may be extended under this change. If an extension is adopted by the local community, the schools must be “made whole” by compensation payments during the extended term.