What are TIF and CRA?

ANSWER:

Quick Answer - A Tax Increment Financing (TIF) district and a Community Reinvestment Area (CRA) district are both economic development tools that are intended to help support development in communities.  They are commonly used throughout the State of Ohio for projects big and small and generally reallocate tax payments to a separate project fund that can be utilized for development. 

In our case, these tools were used to create a financial incentive package to the developer of Stillwater Crossing to help make the project financially feasible to them. 

Typically, development agreements are put in place to make all of the parties impacted by the development "whole" (i.e. the cumulative abated funds are paid out at the end of the project once there is additional funding available) once the project is completed, but that isn't the case for this project.   

More information from the State of Ohio on TIFs

More information from the State of Ohio on CRAs 

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Long Answer - The Village of West Milton created both TIF (2017) and CRA (1979, 1991, 1994) districts to support the future development of land in West Milton, without the direct support or approval of the School District.  Such support was not required due to the state enabling legislation and language used by the Village.

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The School District has continued to work with the Village to try and clarify the future development and its impacts on the District - primarily the number of children that will attend the District and how the school can manage those additional children.  Although there is some disagreement on the projections, all agree the development will create more children for the school, and the school won't have the level of additional funding necessary to educate them (operations funding). 

Since the Earned Income Tax cannot be abated, this will help support the school's ability to cover operational expenses from having more children in the school, but will not cover the full cost of those new students based on the State average cost to educate.

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The development is a good thing for the Village of West Milton, but it must be made clear how the District and the Village will assure that there are enough funds to support the impact of adding that many children to our already crowded school buildings.

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CRA

• The CRA abates property tax money (a percentage of which is defined by the Village) and supercede the TIF exemption if both exist, which they do in Stillwater Crossing.

• The CRA was created in 1979 and amended in 1991 and 1994.

• CRA's created before 1994 in Ohio provide no ability for school districts to approve or deny the granting of abatements within those CRAs.

• In 2018 the Village modified the CRA to include additional lands including the Stillwater Crossing Development.

• The Village will grant abatements for residential (4 years) and a case by case basis for commercial, up to 15 years meaning no additional income will be generated for the School District from the properties which abatements were granted.

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South Side TIF

• May, 2017 - Written notice to the District of the creation of the TIF.

• By Ohio Law the Village can move forward with a TIF without the BOE concurrence IF they guarantee that the District will receive payments in lieu of taxes to the District.

• The BOE concurrence wasn't necessary because the Village promised that the District would receive 100% of the tax revenue it would otherwise receive if the TIF exemption didn't exist. 

• Since the CRA is in place, the TIF is secondary, and does not impact the financial situation of the majority of the site elements for many years.