To hear some folks tell it, TIF districts are shear magic - outperforming non-TIF areas handily. Aaahh - how nice to bask in the sweet light of successful economic development.
Um. Only one problem. It turns out not to be true.
Using growth in 2011 of the assessed value of all taxable property in a TIF district as a measuring stick, only 15 TIFs grew faster than the County as a whole, which grew a modest 0.82%. 25 TIFs not only grew slower than the County as a whole, they lost value.
This is apparently not an isolated year. In 2009, when the County lost 1.2% in total assessed value, 17 TIF districts outperformed the County while 23 TIFs underperformed.
These numbers are pulled from the forms the Auditor submits annually to the State's Department of Local Government Finance. I previously reported the loss of about one third of the value of the base for 2013, substantiated by these forms (see "Marion County's TIF Districts See Base Erode By Nearly Half a Billion Dollars In One Year"). The forms, obtained from the DLGF, are available on Google Docs.
Some more analysis from 2011 --
All TIF districts combined grew only 0.76%, practically a dead heat, but outperformed by a micron by the County as a whole, in fact.
The assessed value of the consolidated downtown TIF district grew by 10.5%.
The assessed value of the consolidated airport TIF district lost 17.8% in value.
The combined assessed value of all TIFs except the consolidated downtown TIF lost 3.6% in value.
So, when they tell you that TIFs are an economic panacea, don't believe them. In our experience in this County, TIF districts do not outperform as a rule - instead, TIFs raise property taxes and cost the taxing units tens of millions of dollars in lost revenue each and every year.
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3 comments:
TIF, tax increment financing except in Indy where there isn't any increment...
Would you know why the TIFs that lost money did so? And in certain districts, wouldn't the under-performance be caused by the problem that those particular districts were already in very bad shape -- bad enough to call for a TIF in the first place?
indy - there must be a bunch of reasons why any area would lose value. TIFs aren't only in areas that need it. More often there is a project a Mayor wants to fund, and uses a TIF to fund it. They then say how this will spur development. So, there should be some kind of proof that it worked, eh?
The airport TIF was supposed to make us all rich. All 5 component districts lost value.
5 of the 6 downtown TIFs gained value, but one did drop value.
Th Martindale-Brightwood and Fall Creek TIFs gained value.
The Naval Warfare Center lost value.
So, its not following any discernable pattern, at least to me.
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