How are other jurisdictions affected by tax increment financing?
Tax increment financing does not reduce revenue allocated to school districts. Existing state school funding formulas offset any gain or loss in property tax revenue. In this way, the state maintains a school’s funding level, no matter what happens to the area’s property taxes. Taxing entities such as the county, school districts, and special districts that serve the project area, continue to receive all the tax revenues they were receiving the year the redevelopment project was formed (the base year). In addition, taxing entities receive a portion of the incremental increase in property tax revenues from a redevelopment project area. A redevelopment agency only has access to tax that surpasses the base year amount. In addition, school districts and community college districts receive a portion of the redevelopment tax increments. For redevelopment projects that were adopted before AB 1290, or January 1, 1994, the Agency negotiated separate agreements with each taxing entity. For those
