Transportation Reinvestment Zones

February 2021

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6. Opportunities and Challenges

Opportunities

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Low political and public resistance when creating TRZs because TRZs are not a new tax or tax increase.

TRZs help local communities expedite, or to make possible in some cases, the delivery of critical transportation projects by closing the funding gap. As a result, mobility is increased, spurring economic development in the area.

TRZ generally entails a great deal of interagency collaboration that opens opportunities to leverage funds across agencies, including the State DOT, the regional MPO, neighboring local governments, and others.

TRZs are a funding mechanism that can promote equity and economic efficiency through the "beneficiary-pays" principle.

Challenges

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Concerns about the ability of the local government to sustain services within the zone as a result of some of the incremental property tax revenue being dedicated to a transportation project.

Uncertainty associated to TRZ revenue streams. TRZ revenues are driven by conditions in the real estate market within the zone.

Counties in Texas have not been able to use TRZ revenues to secure long-term financing to pay for transportation projects. Based on a Texas Attorney General's opinion, it might be prohibited by the Texas Constitution.


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