Mobile TIF Districts Spark Debate Over School and County Revenue

MOBILE, Ala. — A plan to create three Mobile TIF districts could reshape how future property tax growth is spent along the riverfront, the Interstate 65 corridor and in Tillmans Corner, but it is drawing pushback over what it might mean for Mobile County Public Schools and county government. The debate surfaced at the Mobile City Council meeting on Tuesday, Nov. 10, where the mayor’s administration pressed for the riverfront district in particular, tying it to an undisclosed economic development project.

A county revenue report estimates the three districts together could generate about $26.5 million a year within five years. Roughly $13.7 million of that annual amount would be growth that otherwise would have flowed to the public school system.

What the Mobile TIF Districts Would Mean for Taxpayers

A tax increment financing district, or TIF, does not raise anyone’s tax rate. Instead, it changes where some of the money goes. Under the proposal, the property taxes already being collected inside each district would continue to go to the same agencies that receive them today. Only the growth above that baseline would be redirected into a dedicated fund for the district, rather than flowing to the county and the schools.

That captured growth can then be spent on public improvements inside the district, such as roads, sidewalks, drainage and other infrastructure meant to encourage private investment. Supporters of the approach argue that the new development would not happen without those upfront public investments, so the redirected revenue represents money that would not otherwise exist. Critics often counter that some of that growth would have occurred anyway, and that diverting it leaves other taxing bodies to absorb rising costs without the matching revenue.

The numbers by district

The Mobile County Revenue Commission report projects the following annual revenue for each district in five years:

• Tillmans Corner: nearly $12 million a year
• Riverfront: about $9 million a year
• I-65 corridor: about $5.5 million a year

The report also estimates that about $13.7 million a year across the three districts could be diverted from Mobile County Public Schools by that point. That figure equals about 1.5% of the school system’s current budget of $919.6 million. The schools would continue to receive their existing tax revenue; it is the projected growth that would be steered elsewhere.

A Mystery Project on the Riverfront

The mayor’s administration told council members that a proposed project, which has not been publicly identified, could transform the city’s waterfront. The administration compared its potential impact to Airbus’s decision to locate in Mobile and said it believes the project would change the face of the region for years to come.

Details about the project, including what it is and how many jobs it could bring, remain confidential. The administration said it hopes to make an announcement by the end of this year or early next year.

According to the administration, a riverfront TIF district could help pay for infrastructure to support that project. It could also help fund waterfront entertainment development and assist some existing entities with relocating.

Council Concerns About Timing and Scale

Not everyone on the council is ready to move ahead. A council member urged colleagues to slow down, arguing that the administration has framed the riverfront TIF as so critical that disaster would follow if it failed to pass.

The council member’s larger concern is creating all three districts at once. He said two of the proposed districts would be the largest TIFs in Alabama and would rival the biggest in the country, and he questioned asking the county commission and the school board to give up future revenue so abruptly.

He also said he believes the revenue projections are conservative, which could mean an even larger share of growth would be diverted than the report shows. In his view, launching all three districts together could put too much pressure on county and school funding.

At the same time, the council member acknowledged that the county and the schools could still benefit over time if new development broadens the tax base. The key, he said, is structuring the districts so they do not create a financial hardship from the start.

How the Three Areas Differ

Each proposed district covers a very different part of the city:

• Riverfront: The district would focus on the Mobile River waterfront near downtown Mobile, where the administration sees opportunities for the unnamed project and entertainment development.
• I-65 corridor: The interstate is one of the city’s main north-south commercial routes, lined with retail, offices and older shopping centers.
• Tillmans Corner: The community in southwest Mobile is projected to produce the largest revenue stream of the three. More local coverage is available on our Tillmans Corner page.

Projects on the Wish List

The administration has previously offered examples of the kinds of improvements TIF revenue could support. Those include new sidewalks, a new police headquarters and improvements to Murphy High School.

Formal project lists have not yet been presented for any of the three districts. Those lists will be an important piece of the discussion, since they will show exactly where the redirected tax growth would be spent and who would benefit.

What Comes Next

The administration’s next step is to prepare a project list for each proposed district and bring those lists back to the council for review. The council’s finance committee is scheduled to take up the TIF proposals on Tuesday afternoon, Nov. 17.

Residents who want to follow the process can find council agendas and meeting information on the City of Mobile website. Budget information for the school system is available from Mobile County Public Schools.