With some development agreements dating back years, the Princeton City Council must frequently update funding mechanisms known as Tax Increment Reinvestment Zones (TIRZs) and Public Improvement Districts (PIDs). 

They are tools used by local governments to finance infrastructure and improvements within a defined area, often to spur development or redevelopment.

TIRZs allow future increases in tax revenue from a designated area to be reinvested locally, while PIDs levy assessments on property owners to fund infrastructure.

After council debate focused last month on the Westridge subdivision, Mayor Eugene Escobar Jr. posted a public comment saying “residential PIDs and TIRZs are fueling the very problems our city is now struggling with.”

As an example, Escobar said when the city approved the TIRZ for Westridge, the land was mostly vacant, valued at just $1.83 million, so the city would collect 100% of the taxes based on that low, undeveloped value. But once homes are built and that land becomes worth over $119 million, the city keeps only 55% of the new tax revenue and 45% — about $232,000 per year – are reimbursed to the developer, he said.

“Over 30 years, that’s a loss of $6.96 million in tax revenue that could’ve gone toward roads, police, drainage and essential services,” the mayor said. 

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By Bob Wieland | [email protected]