TIF Study Commission Recommendation # 1 : All TIFs Should Have An End Date

I am going to spend some blog time posting what I think are the most significant recommendations of the  TIF Study Commission.  As always, check out the lengthy list of recommendations for yourself - click here and view pages xv-xix  of the executive summary (pages 18-22 of the pdf).

My top spot for most common sense recommendation is that all TIFs should have an end date when they are dissolved entirely.

The current situation is that 11 of Indy's 33 TIF districts have end dates and 22 do not.  No word on the status of the 12 TIFs in the excluded Cities.  Three of Indy's TIFs are classified as 'dormant', meaning all property taxes generated by them is flowing through to the taxing units for the time being.  They can be recalled to service at any time by a mere vote of the MDC, as two were last year.  All new TIFs must, by state law, have an end date of no more than 25 years.

Here is the exact recommendation of the TIF Study Commission:

h. Establish Sunset Dates for all TIFs. The Commission recommends the following with respect to TIF districts that are dormant or have no mandatory expiration:

i. Dormant TIF districts: In the absence of overwhelming justification otherwise, the Commission recommends the termination of all three dormant TIF districts.

ii. TIF districts with no required sunset date: In the absence of overwhelming justification otherwise, the Commission recommends the establishment of termination dates based on the last maturity date of the related bonds.

iii. TIF districts without outstanding debt and which are used on a pay-as-you-go basis: in concert with appropriate community development organizations and in alignment with a comprehensive planning document, the MDC should establish a capital spending plan and sunset date no longer than 20 years into the future.

I would wholeheartedly agree with each aspect of this recommendation.  The promise that we will all eventually benefit from the economic development or redevelopment of a TIF district can and should be fulfilled by letting them expire and all revenues flow as regular tax dollars.  This would lower everyone's property taxes and, at the same time, add more dollars to the schools, library, townships, etc, by lowering the number of people who hit the tax caps.

There is little distinction between the perpetual TIF district and a slush fund for a sitting Mayor from which he/she can dole out favors.