Other RLF Possibilities Local Approaches

Local Solutions to Establish RLFs  Direct Contributions Kossuth County—initial funding direct from the Board of Supervisors.  Expect to use this funding as “match” for later USDA application.

Local Solutions to Establish RLFs Lyon County Tax Increment Financing

Tax Increment Financing (TIF) Ability to Capture New Property Taxes for the Benefit of the TIF District City or County Establish TIF District (20 Years) Certify Base Value New Property Taxes or “Increment” can be captured  Bonds for infrastructure repaid by property taxes  “Rebates” or “Development Agreements” to refund all or a portion of taxes.

Overcoming the Myths TIF Does not take away property taxes 1. TIF captures new property taxes for a set time period. Once debt is retired, new property taxes are distributed normally. 2. There is an opportunity cost to taxing bodies (city, county, school)  Making an investment of tax dollars to spur something that would otherwise not happen  State “backfills” payment to school district

TIF Example— Normal Tax Distribution

TIF Example— TIF District Created

TIF Example— Project Creates New Tax $$

Lyon County Business Start-up—Ethanol Plant  Project Assumptions Est. Assessed Value: $11 million Est. Annual Property Tax: $231,000  County Property Tax Rebate Years 1-590% Rebate* Years % Rebate* Years % Rebate* Years % Rebate * 30% of rebate captured for RLF at Lyon County Development Corporation

Lyon County Business Start-up—Ethanol Plant

 TIF Impacts / Benefits Property Taxes Paid: $ 4.82m Taxes Retained by County$ 2.33m Rebate to Company$ 1.74m Contributions to RLF $745,000 Lyon County Business Start-up—Ethanol Plant