With a schedule that appears to be reverse engineered to beat the expiry date of Ballard's _____ (first, last) term, the Mayor is pushing 4 new TIF districts forward (see earlier blog entry, "Going For Broke - The Ballard Paradigm?"). While the schedule is known, the target projects and their beneficiaries are not publicly disclosed.
September 7 - MDC to vote on the establishment of economic redevelopment areas
September 19 - Introduction to City-County Council
Some time in September and/or October, committee to which proposal is assigned (likely Metropolitan Development committee, chaired by Janice (Shhh!) McHenry) will consider and may take public comment
Depending on committee pace, the full Council would vote on the matter some time in October or November
November or December - if passed by the full Council, the MDC will hold its public hearing followed by its final vote
The past practice of this administration has been to withhold any information which it is not explicitly asked about. Expect the continuing rhetoric to be that they MIGHT invoke a TIF district, right now they just want the flexibility to do so some time in the future and want to be able to lend assistance from other sources when it is appropriate. It sure would be nice if they just came out and said "if passed, they will be TIF districts, just like we always planned", for then the public could comment on reality, not a supposed hypothetical.
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Mark Small posted a blog post
8 hours ago
9 comments:
Perhaps our mayor and others should spend more time on blogs. Here is what one of my favorite blogs, Field of Schemes, has to say regarding TIFs.
--The problem with TIFs are legion: Mostly, that if the increase in tax revenues ends up being cannibalized from somewhere else nearby, or if tax revenues don't increase (it's happened), then taxpayers end up screwed. Or as subsidy expert Greg LeRoy memorably put it, the TIF district "eats the lunch of the general fund."
I'll have to look up that blog. Thanks.
If you don't create a development district, no one comes forward with proposals about what they'd build, and until that happens, it's awfully hard to talk about a TIF except in the abstract. Abstract discussions about TIF's always lead back to the concrete questions of how big it is, how long it runs, and obviously, whether building "X" will actually increase what property values.
It's a lot like a 7 year old boy announcing he likes girls, and listening to all his relatives debating what they think about this girl he's going to marry.
Anon - there will be no request for proposals. They already know what the target projects are and who the financial beneficiaries are.
The more apt analogy is that your 17 year old son just knocked up his girlfriend, and now you have to find the gentlest way to break the news to Grandma and Aunt Trudy.
Anon - I'm not buying the argument that discussion between city govenment and business haven't occurred already. The city is being disingenuous and probably know who and what will be in those districts. They city, per usual, is not telling us anything until this becomes a fait accompli.
You do know that there are 40+ TIFS already in Marion County? This isn't a win-win situation, this is a winner-loser situation. For every TIF granted (winner) some taxing entity (loser) has to pick up the slack.
Why on earth would there be RFP's for a private project? If there's infrastructure work done by the City in connection with a project, that would require RFP's.
Living in Midtown I can point to a number of infrastructure needs. Despite the high property taxes we pay in this area, we don't see "return" on these investments in the form of sidewalks, sewers, road repair, etc. When the community pointed this out to DMD, they added Midtown to the list of 3 other redevelopment districts: one west, one east and one near-North. Declaring a redevelopment district is the first step in creating the possibility for reinvestment monies to flow into these areas. Isn't it a good thing that government is responsive to the will of the people of these areas who have asked for attention? A redevelopment district can result in a TIF but it's not a foregone conclusion. As for Midtown, the community has insisted any TIF funds go toward infrastructure. The Community has also insisted that if the revenues generated exceeds 125 percent of the amount needed to cover the bond, that the money go into the general fund. Given property tax caps, and depopulation that reduces revenues, isn't it a good thing to look for alternative revenue streams that don't increase the tax base but stimulate redevelopment, improve infrastructure and create jobs?
anon 8:56 - while some of the conditions you note should be considered by the Council for all existing and potential TIF districts, one in particular is off the mark, IMHO - that being the deposit of all excess revenues (should they occur) into the City's general fund.
The property taxes being captured rightly belong to all the taxing districts used in the tax rate calculations, not just the City. So, if any money is considered extra, the limit on the base should be raised so as to return the money to all the taxing districts. An alternative is to pay off the TIF bonds early and retire the TIF altogether. For excess revenue to go into the city's general fund, which may not even be legal, is turning upside-down the promises made for creating a TIF in the first place - that being the TIF will bring prosperity to all.
The idea that you do not get your fair share of taxes returned in your area is one held by virtually all neighborhoods, except downtown. If you want to keep local tax dollars local, why not create TIF districts literally everywhere?
I might be more favorably inclined toward some of these TIFs if they were capturing only City/County property tax dollars - which amount to about 1/3 of all property tax revenue. But, the TIF mechanism is a way for the City to use other taxing districts' money for the City's purposes. This leads to a real tax increase for all citizens of Marion County, and it increases the number of properties that hit the tax caps - actually reducing revenues for the units. The units include schools, township government, libraries, IndyGo, etc.
The devil is in the details. Be assured, they are planning on a TIF district being the financing vehicle. Its good you are thinking of some of the problems with overly profitable TIF districts. But, they should be able to prove to ALL citizens of Marion County that each one has an excellent chance to succeed financially and cover the costs associated with the bonds. AND that there is no other way to pay for 10 year infrastructure improvements than to float 30 year bonds.
See my entry "TIF Districts - Who Knew the Base Could Drop" from July. If enough revenue is not generated in a TIF to cover the bond payments in a given year, they simply reduce the base to capture more of the property taxes. By this year, 15 of the 40 TIF districts had bases that were reduced to zero, and another 15 districts combined this year alone to eat up another $44 million of what used to be base AV. So, it seems likely that the base AV you think will remain to pay for other things besides this new debt will shrink, and could slowly evaporate until every property tax dollar generated goes into the TIF fund.
Other things that need to be considered include the geographic size of the district being encumbered for decades to come, and, the authority the MDC has to spend excess money that may or may not be generated before it reaches the 125% mark so as to abide by the technicality of your rule, but not it's spirit.
One last thing - while it may seem localized to your area, the creation of a TIF district affects all taxpayers in Marion County. So, we all need to be paying attention to the creation of 4 new TIF districts.
You can bet B+T will be writing those bonds and collecting the $. A B+T lawyer is writing the MDC resolutions
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