Wednesday, October 6, 2010

Where We Stand With TIF Districts

Right after it was announced that the MDC was going to funnel $8 million a year to the Pacers via the CIB, I happened to be at an MDC pre-meeting where it was noted that the consolidated downtown TIF district took in $43 million a year, but owed debt payments of about $30 million a year(that information wasn't quite accurate -- see below). That got me wondering just how much money is in the various TIF districts around Marion County.

I requested information on all of the TIF districts and I now post it here.

This document lists all of the TIF districts in Marion County, their ID number, and actual revenue numbers for last year (2008-2009), as well as estimated revenue numbers for this year (2009-2010) and next year (2010-2011). These numbers are the amount of property tax revenue received by the TIF district, how much was due on the bonds and other debt owed by the district, and the revenue divided by the debt payment owed that year (coverage). The 'consolidated allocation area' is the consolidated downtown TIF. It includes 8 distinct TIF districts. The 'airport EDA', also known as the 'united TIF', contains 5 distinct TIF districts. Of 44 TIF districts in Marion County, 8 are in the excluded cities and 6 are 'dormant'. The latter still exist, but the revenue flows through to the usual recipients of property tax revenues - the schools, library, townships, etc.

This is probably a good time to pause and outline what a TIF district is. TIF stands for 'tax increment financing'. When a TIF is set up, the assessed value on day 0 is set as a base. All property taxes collected from this base will always be allocated to the usual recipients of property tax revenues. But, as development occurs and the assessed value rises, the new property taxes collected (or the 'increment') will NOT go to the usual recipients. This new money will go to pay off bonds that were floated to give money to the development project. Those of us who advocate for our neighborhoods have always been assured that the debt will be paid off as soon as possible and the new development will then be a benefit to all of the taxing units, not just to the City or the developer. Heck, even the MDC, who votes on the establishment of a TIF district, is told such things.

If you look at 'Total Indianapolis', you see that this year all Indianapolis TIF districts are expected to take in almost $20 million more than is due for debt payments.

Who can spend this extra? Why, Mayor Ballard pretty much gets to make that decision. The MDC is the only body who is must vote on how to spend the excess. The Mayor appoints 4, the Council 3, and the Commissioners 2, members of the MDC. The Mayor introduces his pet projects through the Department of Metropolitan Development. This is the only pathway for projects to be considered by the MDC. So, only projects favored by the Mayor go forward.

The community deserves a discussion on how these extra revenues are spent. Here are some thoughts:

1) pay off the debt early and retire the TIF district so that the benefit from development can accrue to all taxpayers.
2) use it for projects that improve the quality of life for residents, so that they can taste some of the fruit that was promised when the TIF district was created.
3) make an actual plan for improving the area and prioritize where excess revenues go, so as to implement that plan.

Planning is something clearly lacking in this administration. It is much more a shoot from the hip, whoever just walked through the door with their hand out, who-knows-who, who hired the 'right' law firm to represent them with the City, sort of administration.

If you look only at the downtown consolidated TIF district (see IBJ map here), you see just how much of downtown is consumed by it. The improvements to downtown have been promised to reap benefits to all of Indianapolis. Yet, there seems to be no rush to get those improvements out of the TIF districts and onto the regular property tax rolls. They would appear to be a never-ending revolving door where favored people walk in and get boatloads of cash for their project. These folks are corporate welfare queens. And they get rich while the rest of us pay more taxes to make up for their handouts - their handouts that never seem to end. Meanwhile, our library is cutting back hours and our public transportation system is hanging on by a thread.

Yes, the community deserves a real conversation about how best to utilize any excess TIF revenues so that in some small way, the community can actually feel like it is coming out ahead.


Central Indiana Jobs with Justice said...

There was much dissent today at the MDC hearing about the funds in the TIF district, and the commissioners had to ask the Bond Bank for clarification. No one knows how much money is left over, and no one know what you can legally spend it on, and no one is making any effort currently to get that statute changed.

Had Enough Indy? said...

What was the MDC vote?