In 1984-85, about 4.4 per cent of total county-assessed value was in TIF projects, with the
county range of 0 to 6.7 per cent.
One additional effect also occurred. In real, per capita, terms, the total revenue received
by all units of government in California increased between 1977-78 and 1991-92. A good
part of the stress was associated with the earmarking of this revenue for specific programmes (ranging from education to spending on anti-smoking ads), rather than the
aggregate level of revenues. TIF continued this trend because the increment was earmarked for debt service, and the sales taxes ultimately generated went back to the jurisdiction.
Sales tax revenues are subvened by the state to the local jurisdiction by point of sale.
A constitutional amendment passed in 1986 that allowed property tax rate increases for
GO financing upon a two-thirds vote.
Multiple lawsuits forced Hemet to repeal the redevelopment project. Hemet has a population of about 50 000.
The 1993 legislation was the first to define blight in statute. Generally, the project area
must be urbanized, with conditions that cause serious physical and economic burdens that
can't be ameliorated without economic development ( California Redevelopment Association, 1994). The new definition eliminated lack of public infrastructure as a justification
for TIF and social blight is ignored.
Schools still received about 20 per cent of their revenues through the property tax. The
state was also under a court order to reconstitute the public school financing mechanisms,
and thus it used this opportunity to attempt to solve both Proposition 13 and school
financing problems at the same time ( Fischel, 1994
This range was derived as follows. For the worst case, assume that no redevelopment
activity was necessary and therefore assessed value would increase by $1.5 billion, of
which about $750 million would go to schools. If schools received no money through
negotiation, the state would have to give them the $750 million under its current education
funding laws. For the best case, assume that there would have been no increment without
the redevelopment activity. In this case, the schools would have lost no money through
negotiation and the state would not have had to provide any additional backfill ( Gumucio, 1995
Although these are California changes, many of the case studies indicate that similar types
of problem appear whenever TIF is used.
Anderson, John E. ( 1990), "Tax increment financing: municipal adoption and growth", National Tax Journal, XLIII ( 2), 155-63.
Beatty, David F.,
Joseph E. Coomes, Jr,
T. Brent Hawkins,
Edward J. Quinn, Jr and Iris P. Yang ( 1994), Redevelopment in California, 2nd edn, Pt Arena, CA: Solano
California Debt Advisory Commission ( 1995), Recommended Practices for California Redevelopment Agencies, Sacramento: California Debt Advisory Commission.
California Redevelopment Association ( 1994), Legal Clinic on AB 1290, Sacramento: California Redevelopment Association.
California Redevelopment Association ( 1995), "Redevelopment tax incrementdecreases between 1992-93 and 1995-96"