In short, future economic development along a road like the Hidalgo Loop is used to finance present day construction.

Although it sounds fairly complex, the way a TRZ works is quite simple. Hidalgo County, in conjunction with the Hidalgo County Regional Mobility Authority (HCRMA) will establish a Transportation Zone around the Hidalgo Loop. Growth – both commercial and residential - along the Loop will be projected and the increased ad valorem tax generated by the new growth will be estimated. A percentage of this increment, pre-determined by Hidalgo County and HCRMA, will be dedicated to the Loop project. The tax revenue estimates will be used by HCRMA to sell bonds. The money from the bond sale is used to help finance the construction of the Loop. The TRZ will remain in place until the bonds on the Loop are paid off.

The TRZ does not translate into an increase in property taxes. Development of a new transportation corridor always brings growth. Land previously under-developed or classified as “ag-exempt” on the tax rolls becomes new subdivisions, industrial complexes, malls and business complexes. This is growth that would not have occurred without the development of the Loop. In other words, the Loop will generate tax revenue and a percentage of that revenue will be dedicated to the project.

Over time, it is estimated that the revenue collected within the TRZ will be more than necessary to pay the debt on the Loop. At that point, the TRZ can be utilized to fund additional transportation needs within the County. TRZ funding offers Hidalgo County the opportunity to assert local control over transportation planning and development without having to rely on the State or other outside agencies for money and approval.

Hidalgo County is expected to be one of the first jurisdictions in the state of Texas to establish a TRZ.