By Martin J. Kidston
Bear Paw Development Corporation, along with the Havre Chamber of Commerce and community business owners, will come together Thursday to discuss the implementation of a tax increment in hopes of promoting economic development in the city of Havre.
In a newsletter to city and government officials, Executive Director of Bear Paw Development Dick King, said that tax increment financing is a tool, financed by property tax revenue, that can increase private investment in specified areas of a community.
A community determines that existing conditions are having a negative impact on private investment in an area, and when investment is lacking, property taxes decline, public improvements are neglected and increased vacancies occur, King said. The community creates a tax increment district to build up the tax base by encouraging and leveraging new private investment.
Because tax increment financing is used to promote redevelopment and economic growth, King said the process begins when a local government declares that urban renewal in necessary and that blight exists within the community. Tax entities, such as city, county and local school districts must also receive their tax revenue from a stable tax base. A tax increase above the original base value then becomes the increment, and this, in turn, creates a net tax revenue.
The tax increment is the tax collections realized from extending taxing levies, expressed in mills, or all taxing bodies, in which urban renewal...is located against the incremental taxable value, reads Montana Code. The tax increment, if any...shall then be paid into a specified fund held by the treasurer of the municipality.
The code suggests that such increments can be used for land acquisition, demolition or removal of structures, relocation of occupants, construction improvements and payment of revenue bonds issued for urban renewal.
Tax increment financing, implemented in other Montana communities, has proven to be successful. In Missoula, riverfront improvement projects and commercial development have been accomplished under the plan. In Butte, improvements to building facades have been made, and in Great Falls, tax increment financing has gone towards bolstering the citys infrastructure and reversing economic trends.
To learn more about tax increment financing, attend the open meeting on noon Thursday, Aug. 26 at the Great Northern Hotel. A Formal public hearing will likely be held in the future, though a date has not been set.