Niki Kelly, writing for the Fort Wayne Journal Gazette, has an article on SB 17 which would affect Tax Increment Finance Districts.
The legislation examines TIF districts, which allow a city or county to capture property taxes generated by new development and spend the tax revenue on projects that benefit the area.
Most often they are used to entice businesses by promising infrastructure improvements done upfront with the promise of property taxes from the district paying off the bonds in the future.
But that means the money is not going to support taxing units of that area, such as schools, which shifts the burden to other taxpayers.
State wide, according to LSA, about 2.4% of assessed value is in TIF districts.
The legislation would create a remonstrance process by which obtaining 100 signatures could significantly delay issuance of a TIF bond and delay a TIF project. Another provision would prohibit expanding the district unless the existing area doesn’t generate sufficient revenue to fund the original project.
Proponents of TIF districts complain that this bill would damage a valuable economic development tool. Senator Kenley listened politely and probably understood their concerns but noted that taxpayers and their need to pay lower property taxes had to be considered.
It seems to me that the tendency is to continue with economic development uses of TIF money once the original project is completed. When you crunch the numbers at the end of any given TIF project, the reduction to taxpayers generally by letting the TIF district expire is minimal — usually a couple of bucks. The development that can be accomplished by keeping the TIF district probably seems much more attractive. But, on the other hand, I suppose it all adds up.
A thought–if legislature can impose various “things” on local government–perhaps it is time for a consitutional amendment that allows for local government to impose “things” on the whole state. It is amazing to think that the entire collective wisdom of the state is all in attendance in Indy when the legislature is in session. Please save us from the “help” coming out of the legislature.
This article is a good beginning but the investigative challenge is to show how cities such as Mishawaka are annexing valuable agricultural land and absolving their responsibility to adjacent neighborhoods. They are TIF’ing non-profits. St. Joseph County has a huge amount of non-taxable properties listed as non-profits. This includes both major hospitals, University of Notre Dame, St. Mary’s, IUSB, Bethel, and Holy Cross. What Mishawaka has done is TIF and annex areas and to top it all off, adjacent properties are NOT in their school district. The burden of paying for all of this falls on the homeowners. It’s no wonder we have a real property tax crisis.