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I think there are two takeaways from these trends.
First, the theory that the TIRZs are generating property tax values faster than the rest of the City, thus justifying their receiving preferential revenue, is breaking down. If the value of properties in the TIRZs were perpetually increasing faster than the City generally, then their increment should be steadily increasing. Many of the properties in the TIRZs are office buildings, whose value is under severe stress, and I suspect they will likely continue to drive TIRZ revenues down.
Second, it is interesting that taxing entities other than the City have been steadily reducing their participation. There are likely two reasons for that. First, they see no benefit from their participation. Second, and probably more importantly, their taxpayers have not imposed a property tax revenue limitation, so they have no motivation to create a subterfuge to duck the taxpayers' wishes.
Ironically, if the values in the TIRZs begin growing more slowly than the rest of the City, it will actually make the restrictions of the property tax cap more severe. Won’t that be poetic justice!
Some TIRZs have done important infrastructure projects. The Lake Houston TRIZ is currently constructing important improvements to Northpark that are critically needed in Kingwood. But many of the TIRZs have long since outlived their usefulness and become a fiscal drag on the City. Uptown and Midtown certainly come to mind.
TIRZs were never supposed to become perpetual quasi-governmental entities. The City should begin a case-by-case review of each TIRZ with a view toward beginning an orderly liquidation of those whose rationale for existence has long passed.
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