First Do No Harm - Impact of TIFs - Marion County As a Whole

Many people in positions of power in the County prefer to sell the vision that TIFs create 'found money' that would not have existed but for the TIF, and that the property tax revenues that went to the schools and libraries and IndyGo before the TIF was set up will continue to flow to those units of government after the TIF is set up.

Either they don't know the difference between those fairy tales and reality, or they don't care.

TIF districts in Marion County

• do not fulfill the promise of catalysing economic development that would otherwise not happen (see "Most Marion County TIF Districts Underperform the County As a Whole",
• do not fulfill the promise of securing the property taxes that flowed before the TIF was created (the "base") (see "Marion County's TIF Districts See Base Erode By Nearly Half a Billion Dollars in One Year",
• need bailouts in the tens of millions of dollars every year (see "Big Time Bailouts of Indy's TIFs")
• cost property owners and renters more money, and
• cost the units of government in money they qualify to receive but cannot due to the property tax caps ("circuit breaker penalty").

From the TIF Study Commission Report, Appendix 2, part one (page 6) you can find the impact of the TIF districts on taxpayers and governmental units alike. In total, this table tells us that for 2012, the TIF districts in Marion County

• cost property tax payers an additional $56 million in increased taxes, and,
• cost schools, libraries, etc, $43 million in additional circuit breaker penalties to the governmental units.

Property taxes are passed through to renters, so even those who do not own property are on the hook for a higher cost of living because of TIFs. The loss of revenue to the schools, the library, IndyGo and more, results in loss of services - and $43 million can pay for a lot of services.

The percentage of taxable property tied up in TIF districts and which, therefore, do not contribute tax revenues to the schools, libraries, etc, varies from Township to Township.  From the TIF Study Commission Report, Appendix 2, part two (page 4) you can find the following percentages of taxable property tied up in TIF districts in 2012:

Marion County as a whole --- 8.9 %
Center Township --- 33.3 %
Decatur Township --- 14.0 %
Wayne Township --- 9.5 %
Lawrence Township --- 3.6 %
Warren Township --- 1.1 %
Perry Township --- 0.6 %
Pike Township --- 0.6 %
Washington Township --- 0.3 %
Franklin Township --- 0.1 %

The percentage of taxable property tied up in TIF districts in 2013 has grown to 11.1%, in large measure to $490 million of assessed value being removed from the base and given to the increment.  [The "base" is the part of the TIF district that existed before the TIF district was created.  The "increment" is the part of the TIF district that grew after the district was created plus any value taken from the base and turned into increment over the years.]

For next year, two more TIF districts will see their base drop to zero.  Out of 40 TIF districts, we will have 16 where ZERO tax revenues flow to the schools, libraries, IndyGo, etc.  For 2013 we see 3 TIF districts with an increased base, while 23 have a decreased base.

In the past 4 years we have seen $40.5 million bailouts of the Marion County TIFs districts.  These bailouts came from income taxes, garage receipts from city owned garages, transfers between TIFs, and, startling enough, from increased property taxes outside the TIFs to secure the TIFs.

One can only look at all of this information and conclude - Marion County TIFs are in trouble.  They continue to need more property value extracted from the base and continue to need other tax money to keep them propped up.  The more we keep property off the tax rolls or the more property value we add to the TIF increment, the more it costs taxpayer, residents and businesses to make up the difference.  And, the more property we keep off the tax rolls or the more property value we add to the TIF increment, the more it costs the schools, libraries, and IndyGo in noncollectable revenue due to property tax caps.

The TIF districts that we already have in Marion County are costing us a pretty penny each and every year.  They have not spurred development that would not have otherwise occur.   We should at least ask what impact any new TIF districts will have.  Yet, appallingly enough, not one question was asked about the proposed TIFs at the August 27 meeting of the Metropolitan & Economic Development committee meeting.  Such is the fairy tale and those who do not want to know about the reality of Marion County's TIFs.