OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 ↓ (860) 240-0200
AN ACT ESTABLISHING TAX INCREMENT FINANCING DISTRICTS.
OFA Fiscal Note
The bill allows municipalities to establish tax increment financing districts. Current law allows municipalities to use tax increment financing, but only for certain projects.
The impact of the bill depends on how municipalities use these districts. For example, a municipality could incur costs by issuing bonds for various economic development projects. This cost is then potentially offset if: 1) the municipality experiences grand list growth as a result of the development projects; and 2) the municipality uses revenue generated from this growth to pay back the bond issuance.
The bill also allows municipalities to fix the assessments of certain properties within a tax increment financing district. This would preclude any revenue increase resulting from any future increase in the assessment of such property.
There is an additional, minimal cost to municipalities that choose to establish these districts associated with holding a public hearing and publishing notice of the public hearing in a newspaper.
The Out Years
The annualized ongoing fiscal impact identified above would continue into the future subject to changes in municipal grand lists and spending on economic development projects in tax increment financing districts.