Tuesday, August 21, 2012

Big Time Bailouts of Indy's TIFs

The budgets for the last four cycles - from 2010 through the proposed 2013 annual City-County budgets, show massive taxpayer bailouts of most of Indy's TIF districts.  These would be Mayor Ballard's budgets.

Here are the links to the budgets, from which I pulled all the numbers I'll be noting in this blog entry:
2013 budget
2012 budget
2011 budget
2010 budget
Contained in these budgets are catchall funds for the various TIF districts that combine some TIF districts in one fund, and others in other funds.  Please note that the currently proposed 2013 budget does not include a very important fund - the "TIF Revenue Bond Fund" - the one that covers the income and expenses for the combination of the Consolidated Downtown TIF and the Consolidated Airport TIF. This budget proposal also does not give any detail as to which fund transfers came from which, or went to which, other fund.  That information, however, is included in the other budgets.

Three other TIF funds are the ones I want to go into.  There is the "Redevelopment General Fund", the "Redevelopment District Sinking Fund", and the "Economic Development Revenue Bonds Fund".  All take in property taxes from the rest of the TIF districts besides the downtown TIF and the airport TIF.

Here is the short summary.  Over these four budgets, the property tax revenues from the non-downtown and non-airport TIF districts amounted to $53.3 million.  But that was far from the amount needed to cover their costs, which totaled $80.0 million.  They also received an infusion of cash from other taxpayer monies:
$1.2 million from Local Option Income Taxes
$6.1 million from garage operation receipts
$16.6 million transfers from the downtown and airport TIFs
and - wait for it
$16.6 million from additional property tax levies that all of those properties outside the TIFs paid
It bears repeating, property taxes OUTSIDE the TIFs was raised to cover costs associated INSIDE the TIFs, in addition to income taxes and transfers from two better performing TIFs.

This should give all of those in the Ballard administration who are pushing the new TIFs and those Councillors contemplating the new TIFs, a lengthy and pregnant pause.  Taxpayers should demand that no new TIFs are forced through before the recommendations of the TIF Study Commission can be implemented.  These recommendations would not ban TIFs.  They would simply require full disclosure on the proposed TIF so that an educated evaluation of each proposal could be made by the Council, as well as by the taxpayers who will continue to pay for bad TIF decisions - and pay far more than they are clearly told about.

It is not asking much that the lies about TIF districts cease.  We should be given enough information to be able to evaluate - why this TIF, why this place, why this footprint, and why this project.  Instead we are getting almost no pertinent information and much that is available for disclosure, is being deliberately kept from the public.  This is an outrage that all Councillors should demand stop immediately.

One more item that  needs to be shown the light of day in the proposed 2013 related to the "Economic Development Bonds Fund".  In last year's budget ordinance covering the 2012 budget, it was estimated that this fund would have an end of year 2012 cash balance of POSITIVE $5.3 million.  Now they estimate an end of year 2012 cash balance of NEGATIVE $2.0 million and project an end of year 2013 cash balance of NEGATIVE $6.7 million.  What happened to cause a $7.3 million swing in the 2012 budget for a fund whose annual costs amount to only $4 million. You draw your own conclusions as the validity of the budget projections and the wisdom of being satisfied with such a huge negative cash balance in a fund used to pay Indy's debt.  All I know is I wouldn't want to hold one of those bonds.


Jon said...

So over the last four budgets TIFS were 30+ million short in revenue and the administration 1)siphoned monies from LOIT, garage receipts, other TIFs and property taxes. So TIFs don't always increase in value, they do lose money, they do take dollars from other funds and other TIFs and from local taxes! Funny I never heard any negatives about TIFs from our current adminstration. But we also didn't hear from our administration that these TIFs had a serious shortfall the last four years.

And somehow we need 5-6 more of these TIFs to 'better' our communties.

Had Enough Indy? said...

Jon, you have summarized it all quite perfectly !

Anonymous said...

I believe it is illegal to comingle TIF revenue.

Had Enough Indy? said...

Anon - as I understand it, there are subfunds within these larger funds. I do know, however, that transfers have been occurring on some regular basis. I am ignorant of the specific laws regulating such transfers.

Anonymous said...

While I am grateful for Mayor Ballard's service to our country as a veteran, I've never made a more agregious voting error in my life than voting for him in his first term.

I've lived in a dozen residences over five states in the Midwest and South over my lifetime. I've never, ever, experienced something of this magnitude first-hand. I've read or heard about it in the administrations of Daley in Chicago, or Huey Long in Louisiana, or Pendergast in Kansas City. But to go through it first-hand!

The most chilling aspect is it's the excesses of the Bush administraion that wrought the severe pendulum swing of President Obama. What deeper economic irrationality is going to "rescue" us after Ballard?


Had Enough Indy? said...

Anon 10:20 - I see it as independent of the national or state picture.

It looks like we are on the edge - where we could land on either side - of a feeding frenzy in favor of new TIFs. Fed by a 'you got yours, now I want mine' attitude.

Beyond TIFs, it looks like the establishment Republicans tried to pillage as much as possible, thinking Ballard's first term was their last in Indy. Surprise, he won - now they are creating new slush funds to raid by creating new TIFs. They are selling off the City County building as one of the few assets they tangentially have any influence over. Since they do not technically own it, they coutch it in lies that somehow they can save money by selling the rights for some up front money.

Again - they are reaching into the next generation's pockets to spend money today.

It isn't stopping at city hall. More permanent damage will be done at the airport. They construct their lease agreements specifically to lowball the private sector on price per square foot - all the while refusing to return the property to the tax rolls. Releasing the land they do not need for aviation purposes would help every governmental unit in the County and every taxpayer in the County.

Tell your friends. Pass the word. The insanity needs to be stopped.

Anonymous said...

No disagreement on the insanity of it. I just think both major parties (across levels of government), routinely spend money we don't have to preserve percieved reelection chances from a targeted constituency. Bipartisan, collective sacrifice on behalf of all our futures is no longer a consideration.

Maybe that's too idealistic a notion, but the closest local figures I perceive apt to believe this possible would be yourself and Christine Scales.

I thank you both for your work.

CorrND said...

Nice investigative work. Maybe I'm missing something in the details, but just curious about this:

Why are they infusing the under-performing TIFs with $40.5M (1.2 + 6.1 + 16.6 + 16.6) when the shortfall is reportedly $26.7M (80 - 53.3)?

Had Enough Indy? said...

Good catch CorrND. They have items within each fund's revenue list that are negative numbers. Transfers of money out are negative numbers. They also parked some of the property tax cap hits in these funds - which show as negative numbers. The operating budgets were actually higher than $80, but I used the shortcut of adding the final total of each fund.

Hope that makes some sense.