The agency tasked with keeping downtown Somerset alive is banking on the potential of new tax revenue to help revitalize the center of Pulaski County’s commercial hub.
A Tax Increment Fina-ncing (TIF) district could be the key, according to plans unveiled by the Downtown Somerset De-velopment Corporation (DSDC) on Wednesday. The organization has initiated a study that they hope will bring millions of dollars in economic vitality to the area.
Officials are optimistic it could have an impact on the long-discussed Virginia Cinema makeover, breathing new life into the defunct downtown theater.
“It’s too early to be certain about anything,” said DSDC President Jamey Tilley, “but our board feels it’s an avenue that should be explored.”
Under a “TIF” plan, local and state governments would rebate as much as 80 percent of any new tax revenue that results from a development back to it’s own certain area. This tax money would pay for infrastructure work needed to create the development.
In other words, a project like the Virginia Cinema could end up producing the kind of revenue that would allow it to pay for itself under the proposed plan. Likewise, new developments in the area around the facility could produce financing for it and overall downtown revitalization. Rather than these projects being solely paid for up front, the tax revenue generated will essentially help retroactively pay for the costs.
Officials stressed that taxpayers won’t be paying anything more than they are now, with no change in the rates, and that this isn’t a special taxing district of any sort. However, government agencies get new tax revenues that wouldn’t exist without the new development.
Commonwealth Economics of Lexington will soon begin a study to determine if a TIF is feasible for Somerset. Commonwealth Economics President John Farris — a former Secretary of Finance for the state — has been involved with practically every TIF project in the state since the legislation enabling such an approach was formed eight years ago. (TIF funding was opened up to all Kentucky cities in 2007 after initially only being available in Louisville.)