When the redevelopment project area is adopted, the current assessed values within the project area are designated as the “base year” and includes the assessed value of all land and improvements within the boundaries of the project area.
After plan adoption, all the taxes paid on this “base year” assessment go to the city, county, school districts, and other taxing agencies. Any increase in assessed value above this base year value within a project area and the taxes resulting from this increased in assessed valuation is “tax increment”. This tax increment becomes the main source of revenue for the agency.