The Stealth Tax Increase in Pawtucket for the Stadium

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Kate Bramson’s Providence Journal article hones in on the possibility that Pawtucket might need to borrow more money for the proposed PawSox stadium than is being stated in order to have a fund to pay off the bond in the time before the supposed wave of new economic development.  The other possibility is more of a red flag, though:

Extending the district around the stadium from which commercial property and other taxes would go into a special account to pay back the bonds, rather than into the state’s or city’s general fund [such a district is called a “tax-increment financing district”].

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In theory, this means that the city would draw a circle around the stadium and assume that any increase in taxes from within that circle are attributable to the stadium.  This money would go to pay off the bond.

The fact that this would be an “extension,” however, is an acknowledgement that the increase in revenue probably isn’t really attributable to the stadium.  So, in practice, the expanded TIF district means that taxes will have to go up for everybody else in Pawtucket in order to cover the city’s regular operating budget.

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