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SUBJECTS › ECONOMIC DEVELOPMENT › Community Revitalization Financing (Tax Increment Financing)
Updated 04/08

Community Revitalization Financing (Tax Increment Financing)

Contents

About Tax Increment Financing and the Local Infrastructure Financing Tool (LIFT)

Tax increment financing (TIF) or community redevelopment financing is a method of redistributing property tax collections within designated areas to finance infrastructure improvements within these designated areas.   Washington does not have the tools for tax increment financing found in other states.  Attempts to authorize the use of state property tax revenue in Washington to finance developments through TIF have been struck down by the voters and the courts. The 1982 the Community Development Refinancing Act (Chapter 39.88 RCW), was ruled unconstitutional in Spokane v. Leonard (1995) on the grounds it diverted tax revenue intended to support the common schools. Washington voters rejected attempts in 1973, 1982 and 1985 to amend the Washington Constitution and authorize tax increment financing. Legislation was passed in 2001, Community Development Refinancing to rectify the problems of the 1982 legislation. It was further amended in 2002.   In 2006 the legislature supplemented existing tax increment finance legislation with the Local Infrastructure Financing Tool Program (LIFT).

Statutes

  • Ch. 39.89 RCW - Community Revitalization Financing  - Authorizes counties, cities, towns, and port districts to create tax increment areas within their boundaries where community revitalization projects and programs are financed by diverting a portion of the regular property taxes imposed by local governments within the tax increment area. 
  • Ch 181 Laws of 2006 (ESSHB 2673) ( 90 KB)  Local Infrastructure Financing Tool Program (LIFT) - Partial Veto - Provides funding for local infrastructure using sales tax, property tax and selected other excise tax increases generated by an economic development project as part of a revenue development area designated by the sponsoring local government.

    The incremental increase in taxes may be credited against the state sales and use tax revenues up to $1 million per year per project. The annual aggregate amount of local taxes credited against the state sales tax is limited to $5 million per year. The bill includes three specific demonstration projects in Bellingham, Vancouver, and Spokane. It also allows additional jurisdictions to submit projects for approval for funding in a competitive process administered by the Community Economic Revitalization Board (CERB). 

    The Governor vetoed section 702, which required the Office of Financial Management (OFM) to conduct a study of governance and selection criteria for the Local Infrastructure Financing Tool program. In her veto letter, the Governor noted that this study was made redundant by changes in the final version of the bill that identified CERB as the lead agency and instructed the agency to provide governance and project selection criteria. (From AWC Final Legislative Bulletin)

Local Infrastructure Financing Tool (LIFT) and Tax Increment Financing Implementation

  • Local Infrastructure Financing Tool (LIFT) - Community Economic Revitalization Board (CERB) - Application information
  • Community Economic Revitalization Board Local Infrastructure Financing Tool Requirements  Revenue Development Area Requirements ( 34 KB) - Community Trade and Economic Development
  • Bellingham Waterfront -  New Whatcom Finances and Economics - Scroll down to see LIFT documents.
  • Everett Revenue Development Area
  • Spokane
    • Spokane Ordinance No. C33551 ( 3 MB) establishes the Iron Bridge Tax Increment Area; exhibits include council action memorandum, Spokane County resolution agreeing to the proposal,  and agreement between city and county to use community revitalization financing
  • University Place
    • Hearing Notice ( 93 KB) to Create a Revenue Development Area and Apply for LIFT Program
    • University Place Ordinance No. 523  (  127 KB) - Establishes a Revenue Development Area and Authorizes a Community Economic Revitalization Board Local Infrastructure Financing Tool Competitive Program Application  - Project includes 1,200 stall public parking garage;  park, open space and public art improvements; enhanced pedestrian sidewalks, cross-walks and a public plaza; § grid-roads, streets, street lighting and traffic control improvements; and  water, sewer, storm water, gas, electric and other utility infrastructure improvements, passed 5-08.
  • Vancouver Riverwest Development Area (Vancouver Ordinance M-3834 - Creation of the Riverview Revenue Development Area (RDA) and Making Other findings and Declaration in Support of the City’s Application to the State Community Economic Revitalization Board (Board) for Local Infrastructure Financing Tool (LIFT) Financing)

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