Onus of TIFs Not Equally Shared

Anyone who has followed this blog for very long knows that TIF districts cause all of our tax rates to rise, account for at least half of the circuit breaker penalties that plague the delivery of basic services (from cops to schools), and are really slush funds so the Mayor can reward his favorite developers, bond salesmen, and lawyers.

Most of us know that the burden of having TIF'd real estate is not distributed evenly.  I was given a heads up last week, that there is information available on the State's Gateway website related to assessed values.  When I saw that information, I found it also had important data about the distribution of taxable property between the various taxing districts in Marion County.

From this information I was able to calculate the amount of real estate assessed value, personal property AV, and more, as a percent of the total for each Township.

Before I pull you too far into the weeds, let's back up a tiny bit and define some terms.

Property taxes are based on the value of the real estate and the value of personal property owned by businesses - from conveyor belts to manufacturing equipment.  Business personal property is in the crosshairs of Governor Pence and the Indiana Manufacturer's Association for eventual elimination.

The data available on the State's Gateway website go into a fair amount of detail.  It also notes how much of the assessed value of a TIF is being 'passed through' in a given year.  This decision is made each year by Mayor Ballard/Vaughn, through the actual vote of the Metropolitan Development Commission, which he controls.  Each TIF district is examined for how much tax money the Mayor wants to keep, and he 'generously' sends some back to the other taxing units.  But, next year he could simply decide to keep all that value in his slush funds.  It is optional.

I looked at the percentage of assessed value of real estate in each Township caught in a TIF - both before and after the pass through.  (for those who don't mind the weeds - these numbers are the net AVs after deductions, like the homestead deduction, are subtracted)  The number before the pass through is the truer value of the amount of real estate actually ensnared by the TIF.  The number after the pass through is the truer value of the tax base for the TIF in a given year.  I also pulled out the percentage of assessed value of the personal property in each Township caught in a TIF district.  Because Beech Grove, the City of Lawrence, and Speedway have all created their own TIFs, I also aggregated the number for each of these entities.  But, please be aware, that the Township data contains these three city/town data.

Township or City/Town	% Net Real Estate AV in TIF after pass through	% Net Real Estate AV in TIF before pass through	% Net Business Personal Property AV in TIF
Center	39.49%	44.58%	26.72%
Decatur	24.86%	24.86%	0.00%
Franklin	0.03%	0.03%	1.03%
Lawrence Tnshp	4.23%	7.71%	0.83%
Perry	0.70%	0.70%	0.00%
Pike	2.35%	8.91%	2.97%
Warren	0.65%	1.40%	4.16%
Washington	0.01%	4.86%	0.00%
Wayne	9.78%	10.02%	8.41%
Total Marion County	9.77%	13.10%	10.65%
Beech Grove	6.72%	6.72%	2.31%
Lawrence - City	14.06%	14.06%	3.49%
Speedway	4.09%	5.81%	37.52%

Center Township has a frightening amount of real estate trapped in TIFs, at 45%.  To add to the tax burden, they also have the lion's share of personal property in TIFs, at 27%.

My community, Decatur Township, is hit the next hardest for real estate value in a TIF, at 25%.  Luckily, for a while anyway, all the taxes from personal property are outside the TIF.

Wayne Township is hit next hardest with a combination of 10% real estate and 8% personal property value in a TIF.

Washington, Lawrence, and Warren Townships are each home to a 'dormant' TIF district, whose entire AV is passed through each year.  As noted above, that can change with the whim of the Mayor.  The City of Lawrence's TIF districts account for all of the active TIFs inside Lawrence Township.

Pike Township has one TIF district - the Dow Elanco TIF.  This was a dormant TIF just a couple of years ago, but was reactivated recently.  The majority of the value is passed through at the discretion of the Mayor.

The Town of Speedway has evidently gone a slightly different route, capturing far more value from business personal property than real estate inside its TIFs.

 Taking the County as a whole, we are up to 13% of our real estate tax base inside a TIF.  This year some of it was passed through to help pay for basic services, reducing the actual TIF tax base to 10%.  But, as I keep saying, next year the Mayor could decide to keep it all for his special friends.

These numbers probably illuminate the reason Decaturites hate TIFs.  It is a puzzlement, though, why Center Township residents haven't stormed City Hall with torches and pitchforks.

Budget Notice - Wayne Township Government

There is a public notice in today's Indianapolis Star for Wayne Township Government. This appears to be the second time it has been published.

From a total estimated budget for 2011 of $27,350,000, they note a maximum levy from property taxes of $22,000,000 - up from $19,258,286 this year. The Township Board will have a hearing at 6:00 pm, August 12, at 5401 W. Washington Street. The Board is expected to vote on the final budget on September 9th.

2010 Tax Cap Credits - Townships and Excluded Cities

Continuing with the tax cap credits information provided to me by Marion County Treasurer, Mike Rodman, and Administrative Deputy, Cindy Land, today we look at the Township governments as well as the larger Excluded Cities and Towns in Marion County.

The levy figures noted below come from the Indiana Department of Local Government Finance's 2010 Revised Certified Budget Order for Marion County.

	LEVY	Circuit Breaker Credit	%
Township Government
Center	$2,783,421	$264,379	9.5%
Decatur	5,474,087	671,084	12.3%
Franklin	8,982,379	2,200,978	24.5%
Lawrence	11,941,055	663,857	5.6%
Perry	346,557	12,757	3.7%
Pike	16,544,673	330,986	2.0%
Warren	276,097	11,612	4.2%
Washington	700,060	32,685	4.7%
Wayne	19,258,286	2,539,176	13.2%
Excluded Cities & Towns
Lawrence	$8,923,358	$440,173	4.9%
Beech Grove	5,576,089	1,565,259	28.1%
Southport	185,826	3,252	1.8%
Speedway	5,219,915	53,829	1.0%
Clermont	481,471	83,313	17.3%
Cumberland	912,369	169,300	18.6%
Homecroft	75,132	1,183	1.6%
Meridian Hills	165,871	1,500	0.9%

It should be noted that these levies may not be the entire amount of tax money that these units receive. In the case of the Township governments, I do believe that is the case, but I could not find a quick reference with that information posted. So, these figures show only the effect of the property tax caps on the property tax revenue each taxing unit obtains.

The levies for Center, Perry, Warren and Washington Townships are lower because IFD handles their fire protection and is a separate taxing unit. For reference, the Indianapolis Fire Special Service taxing unit saw $2.9 million circuit breaker credit impact on its levy of $53.9 million - amounting to a 5.4% impact.

As with the overall Township information posted yesterday, Franklin Township government stands out, followed by Wayne and Decatur. Beech Grove, which spills into 4 Townships, saw the greatest impact from the tax caps on the revenue it gets from property taxes.

Get Your Waders On - Marion County Tax Cap Credits for 2010

The tax caps are now fully in effect for property taxes in Indiana. Homestead property is capped at 1%, farms and rental property caps come in at 2%, and commercial real estate is capped at 3% of the GROSS Assessed Value.

Tax cap credits were applied to all properties whose tax bill was going to be greater than the percentage allowed by the tax cap for that type of property. If your bill was going to be $1251, and the tax caps only allowed a maximum of $1000, then your 'tax cap credit' is $251. Tax cap credits are called 'circuit breaker credits' as well.

Well, we now have the total amount of circuit breaker credits issued in Marion County for 2010. Thanks to Mike Rodman, Marion County Treasurer, and Cindy Land, Administrative Deputy, for providing me with the information.

I did a little crunching of the numbers to bring them to the level of the circuit breaker credit applied by Township. Below I also list the property tax 'levy', which is what the bills would have totaled without the tax caps. The '%' column shows the circuit breaker credit as a percentage of the 'levy'.

	LEVY	Circuit Breaker Credit	%
Center	$136,294,039	$13,320,476	9.8%
Decatur	35,771,565	4,381,038	12.2%
Franklin	65,315,789	16,053,299	24.6%
Lawrence	115,826,538	6,933,160	6.0%
Perry	82,864,464	4,029,404	4.9%
Pike	106,431,438	2,352,852	2.2%
Warren	86,482,678	3,896,972	4.5%
Washington	158,059,289	10,323,966	6.5%
Wayne	122,517,578	14,005,273	11.4%
Marion County Total	909,563,378	75,296,439	8.3%

Obviously, Franklin Township stands out with a quarter of all property taxes given a tax cap credit. Even looking at it as a total dollar amount, Franklin Township scored the highest with over $16 million in credits, besting far more developed Townships.

Overall, property taxpayers saved an aggregate of $75 million in 2010 on property taxes due to the new property tax caps.