Chattanooga’s City Council is set to vote Tuesday on new rules guiding how and when local tax revenue may be used to aid private developments.
The proposed ordinance comes out of the controversy three years ago when tax increment financing for the Black Creek Mountain development provoked a lawsuit against the city bond board.
The council will consider a 22-page resolution that spells out how the city should evaluate and decide on using tax increment financing for economic development. Such financing – known as TIFs – allows the city and county to build infrastructure or even pay for part of a development in advance, reimbursed by the extra property tax collections local governments will recoup over time from the project.
Chattanooga Mayor Andy Berke said there are no pending proposals for TIFs, but the city needs to have a policy if such a proposal comes up.
“Before, we really didn’t have standards for how to evaluate proposals for tax-increment financing,” Berke said. “We want to make sure if one ever comes along in the future, we have transparent standards to judge it by.”