The Washington State Legislature authorized tax increment financing in 2021 and made updates in 2023. It is a new financing tool in Washington, allowing cities, counties and ports to establish Tax Increment Areas (TIAs) to fund public improvements that help enable new private development. All TIAs must have a specified boundary, a set duration (maximum of 25 years), and a specific list of public projects to be funded.

The proposed boundary for the TIA includes 364.5 acres of land focused on the intersection of Myra Road and SR-125 and is generally bordered by NE Rose Street to the north, Plaza Way to the east, past Taumarson Road to the south, and Winona Lane to the west.

Proposed TIA Boundary Map: 

TIAs receive funding from the new property tax revenue generated by the growth in assessed value for properties located in a TIA. Existing property tax revenue continues to be collected by the current taxing districts. Taxing districts temporarily forego some taxes raised from the increase in assessed value in the TIA, and the dollars are directed toward public infrastructure improvements in the TIA. The intent of a TIA is to fund public projects that stimulate growth in assessed value that would not occur without those public projects. Thus, a portion of the foregone tax revenue would not exist without the TIA investments.

The property tax levies imposed on properties within the proposed City of Walla Walla TIA are listed below. Voter approved general obligation bonds are NOT impacted by a TIA. Levies for State and local schools are also NOT impacted by the proposed TIA.

Levies impacted by TIA:

• County Current Expense
• City of Walla Walla Regular
• Port of Walla Walla
• Emergency Medical Services

Levies not impacted by TIA:

• State Schools (Part 1 and 2)
• Walla Walla Public Schools: General and Bond Funds and Reserve Funds
• College Place Public Schools: General, Capital Project, Bond, and Transportation Vehicle Funds

The property taxes being levied on the current assessed value within the TIA boundary will continue to go to the overlapping taxing districts. Property tax revenue from increases in assessed value within the TIA boundary after the TIA is established will go to the City to pay for public improvements within the TIA boundary (called tax allocation revenues and shown in orange on the following chart). This tax allocation revenue is generated from new development in the TIA and from appreciation of existing properties.

Once the TIA has expired (no more than 25 years after receiving its first increment), the overlapping taxing districts will receive the full amount of property taxes from the increased assessed value in the increment area. This is illustrated in the chart below.

The goals and objectives of the TIA are:

Goal 1: Promote and develop transportation systems that support and enhance the movement of people and goods to ensure a prosperous economy.

Objectives:

• Provide the infrastructure needed for business and industries to locate in Walla Walla, including transportation connections and suitable land capacity.
• Establish stable and diverse revenue sources to meet transportation investment needs of the City.
• Provide all users with complete streets that connect the City of Walla Walla’s neighborhoods, parks, schools, employment centers, and retail areas.

Goal 2. Create a thriving retail economy with ample shopping opportunities that allows local residents to shop in the city.

Objective:

• Work with property owners to develop the Myra Road corridor as a mixed-use urban village that supports both commercial and residential development.

Revenue generated by TIAs primarily occurs through redirecting property taxes generated by existing tax levies, rather than imposing new property tax levies. However, establishing a TIA may result in slight changes to the calculation of existing property tax levy rates, including slight increases for some levies and slight decreases for others. The increase in taxes on a property valued at $100,000 is estimated to be less than 73 cents per year.

A TIA provides an additional funding source to complete needed infrastructure projects. These projects will provide infrastructure that enables new development that will provide services and jobs for our community. 

The governing body (the City of Walla Walla) adopting the TIA manages the revenues. The City is only allowed to spend the tax allocation revenues on specific projects within the tax increment area that were identified during the adoption process.

No. The proposed TIA will not negatively impact schools. The property tax levies for the Walla Walla Public Schools and the State Schools funds would not be included in the calculation of tax allocation revenues, and therefore would not experience any foregone revenues from the TIA.

Private development anticipated to occur as a result of public improvements within the proposed TIA would generate increased property tax revenues for state school funding.

For local schools, new development within the TIA would allow the same amount of funding to be generated by existing levies while reducing the levy rate imposed on properties within the School District. The impact on the levy rate is not expected to be significant.

The projects to be undertaken that would support continued taxable new development within the proposed TIA are:

• Myra Road Extension. Extends Myra Road south from SR 125 to Taumarson Road.
• Plaza Way Improvements. Roadway improvements from Village Way to Taumarson Road.
• Plaza Way/Taumarson Road Intersection Improvements. Intersection capacity and safety improvements.
• Highland Road Improvements. Roadway improvements from City limits to Plaza Way.
• Village Way Improvements. Road improvements from the terminus of Village Way to Plaza Way.

The proposed TIA is expected to generate substantial economic impacts for the local and regional economy, while enabling up to $192.8 million in private investment. The infrastructure investments supported by the proposed TIA would support a significant level of development, with substantial employment from construction as well as ongoing business activity. Tax revenue from the development stimulated by the projects in the TIA are significant.

The full economic analysis can be viewed in the Project Analysis Report.

The City of Walla Walla is currently evaluating the feasibility of a TIA. It is anticipated that the City will decide on whether or not to proceed with establishing the TIA in early 2024. The City participated in outreach throughout early 2024 to educate the community about and seek input on the TIA. The City held two official public briefings as part of the adoption process.

For more information or to submit a question, please contact Deputy City Manager Bob Francis at 509-527-4540 or rfrancis@wallawallawa.gov.