Tully repeats that tired old fairy tale that TIFs only capture new development.
First, the TIF captures only new property tax revenue -- meaning money from new investment over and above what is already collected.We see this year, where $490 million of base - which is the 'old stuff' - in Marion County's TIF districts, was converted into increment - which is, according to the fairy tale, supposed to be only the 'new stuff'. That's a full third of the existing base. How much time would it take to accumulate an additional $490 million of property value for our tax roles through development? And yet, in one year that huge amount of property value is yanked from producing tax revenues for the schools, libraries, IndyGo, Health & Hospitals, fire departments, IMPD, parks, as well as the city-county government.
Where Tully gets alarming is where he promotes brand new fairy tales about TIFs. He actually most succinctly framed the idea in a short twitter debate he had with Amos Brown a week ago. Below is a screen shot of the back and forth so you can get the context in which Tully said
"If Midtown continues losing high income families that's a disaster for the city--particularly the most struggling parts of it." Huh? And, from the context, TIFs are apparently the answer.
Let's face it, a Mid-North TIF is a solution searching for a problem.
Tully is promoting the idea that TIFs are designed to bring tax dollars into well to do neighborhoods to make them even better places to live so that rich people stay in Marion County. His logic is other worldly when he can reach the conclusion that improving the lot of the well to do has a positive impact on those who struggle daily.
If it were just Matt Tully, a person, with this attitude, it would be part of the community conversation. But, it is Matt Tully, the print media columnist, who is spreading this insidious meme that TIFs are for the better off areas.
You likely remember that extraordinary series of columns Tully wrote about the Meadows years ago now. Where is that Matt Tully? TIFs were designed to help just this type of neighborhood, where no dollars are going and a few dollars has a shot at making a real difference; first in the real estate, then in the lives of those who can't afford the rent in Tully's neighborhood.
If there were a prioritization of neighborhoods in need in this city/county, Meridian Kessler, Broad Ripple, and Butler-Tarkington wouldn't be anywhere near the top of the list. Yet, they want to get theirs first, before the reality sinks in that TIFs have consequences, not all of which are good for Indianapolis and its future.
The last couple of years, Tully has taken immense amounts of time to experience IPS, and he penned riveting and pivotal pieces that helped to elevate the discussion of education in Indy. Where is that Matt Tully? Doesn't he know that existing TIFs already harm IPS' bottom line? And yet he is promoting the creation of another square mile TIF in the IPS district. They call the downtown TIF the "dead zone", because of all the property value that does not send revenue their way. IPS already has 22% of all taxable property within its district caught up in a TIF increment. One-fifth. That's twice the average for the County as a whole. 40% of the circuit breaker penalty (the property tax revenues that government qualifies for, but cannot collect due to the property tax caps) in the County can be attributed directly to TIF districts and their sequestration of property value. With its higher percentage of property valued contained within TIFs than the County as a whole, one would estimate that TIFs cause an even greater percentage of the $15 million circuit breaker penalty that IPS will see in 2013. What could IPS do with an extra $6 to $12 million a year more?
But this Tully, the one for whom there is no valid and valuable community conversation about TIFs going on, this Tully would add another square mile of untouchable tax revenue in IPS's district. He seems to think that excluding residential property from the proposed Mid-North TIF is a positive. But, lets face it, residential property has a 1% tax cap, and the TIF would capture the commercial values - which are higher in assessed value and which have 2 % and 3 % tax caps, so pay a greater proportion of property taxes from the same size lot.
Tully does columns on crime in a variety of areas in our city-county. Yet, he doesn't mention that TIFs take revenue away from IMPD - not just shelter revenue from IMPD's grasp, but take it away in the form of the circuit breaker penalty. According to Jeff Spalding, City Controller, the 2013 circuit breaker penalty will be over $5 million for IMPD and over $7 million for IFD. As currently configured, the 2013 budget calls for no IMPD recruit class and one for IFD only if they can get their hands on a federal grant. Again, at least 40 % of those circuit breaker amounts are directly attributable to existing TIFs.
Well, with or without Matt Tully, the community conversation about the reality of TIFs will continue. Personally, I had hoped by this time our conversation would be about how much of our property value should be tied up in TIFs for the next 25 to infinity years. Other jurisdictions that use TIFs and place a limit, set that limit at 5% of property value. We are at 11%. With the ramrodding of TIFs through the Council prior to the implementation of the recommendations of the TIF Study Commission, based on incomplete information, one has to wonder what generational damage these folks are doing.
Tully has a soapbox courtesy of the Star's circulation. He also has a responsibility to be accurate with the facts he sprinkles throughout his columns to support his opinions. On the TIF issue, he completely and utterly fails on the accuracy test.