Tax increment financing is a unique tool available to cities and counties for redevelopment activities. It is used to leverage public funds to promote private sector activity in the targeted area. Tax increment revenue is the increase in ad valorem tax attributed to the increase in the assessed property value over a set ‘base year” for the redevelopment area.
The government jurisdictions remitting tax increment revenue to the Sebastian Community Redevelopment Agency (CRA) are the City of Sebastian and the Indian River County Board of County Commissioners. Taxing authorities, who contribute to the tax increment, continue to receive property tax revenues at the base value. These revenues are available for general government purposes. However, any tax revenues from increases in real property value, referred to as “increment,” are deposited into the CRA Trust Fund and dedicated to the redevelopment area. The major funding source for the Sebastian CRA is tax increment revenue.
Revenues Not Effected
It is important to note that property tax revenue collected by the School Board and any special district are not affected under the tax increment financing process. Further, unlike in some states, Florida taxing entities write a check to the CRA trust fund, after monies are received from the tax collector.
Using the Revenues
The tax increment revenues can be used immediately, saved for a particular project, or can be bonded to maximize the funds available. Any funds received from a tax increment financing area must be used for specific redevelopment purposes within the targeted area, and not for general government purposes.