The two entities would participate in a Tax Increment Reinvestment Zone, or TIRZ, a finance tool cities can use for improvements. A TIRZ is also called a Tax Increment Finance district, or TIF, the language Richardson officials use. Magner said TIRZ are typically created using property tax; however, sales tax can also be used.
Cities can establish a TIRZ, which allows tax revenue collected within the zone to then be used for economic development.
In a nutshell
If approved, the two entities would determine a sales tax revenue baseline value and DART would keep all sales tax revenue collected until revenue reaches the baseline value. Any revenue collected above the base value would be split equally between DART and Richardson.
The revenue is set aside and can be used for improvements to the area such as street or sidewalk improvements.
The additional revenue collected will be issued quarterly, Magner said. The agreement would set a timeline in which the two entities would split the revenue.
Richardson City Council member Joe Corcoran said a TIRZ or TIF is not meant to be permanent and is used to develop the economy of a certain area and, once developed, dissolved.
“This is a tool we never expected having at our disposal,” Magner said.
Zooming out
Should the program move forward, all DART member cities will be allowed to participate in the program. Cities can either enter the agreement with a TIRZ that is already established or cities can create a new one.
Additionally, Magner said it would be possible to set sub-areas within a TIRZ for the program.
Cities can participate using an existing TIRZ or create a new one; however it must have a “transit anchor.” such as a DART station or a Park and Ride center.
The city must also dollar match any funds contributed by DART for improvements. Magner said the funds cities can use to match can come from a variety of sources.
What’s next?
Several member cities were asked to give presentations to their City Councils and offer feedback to the DART board. In May, DART will meet with city managers from the member cities and will vote on approving the program at the May 13 or May 27 board meeting.
The program comes amidst a funding dispute between DART and several of its member cities. A majority of DART funding comes from a one-cent sales and use tax paid by its 13 member cities—six of which have called for a 25% funding decrease.
Magner said if HB 3187, a bill that would redirect 25% of the sales tax revenue DART collects back to member cities, the program would not move forward.
