First Do No Harm - Impact of TIFs - Wayne Township

In my last two posts I mentioned the fairy tales that are promulgated in order to sell TIF districts. In case you are reading this entry because of its Wayne Township focus, let me repeat some significant fairy tales and facts.

Fairy Tales Used To Sell TIFs:

First, the taxes that flow from the district before the TIF is set up will continue to flow to the schools and libraries and other taxing units, just like before. Second, the project being funded is just the thing to spark other, privately funded, economic development. This boost in economic development will spur an increase in property values that will pay for everything and we'll all be better off.

Little Know Facts About Marion County TIFs:

• taxes promised to continue to flow (the "base") have been shifted over to pay off TIF bonds and expenses (the "increment") (see "Marion County's TIF Districts See Base Erode By Nearly Half a Billion Dollars in One Year"),
• tens of millions of dollars from income taxes, other TIFs, and additional property taxes have been poured into existing TIFs to shore them up (see "Big Time Bailouts of Indy's TIFs"),
• most TIF districts have been growing more slowly than the County as a whole (see "Most Marion County TIF Districts Underperform the County As a Whole"),
• existing TIF districts cause 1/3 of the circuit breaker penalty, directly causing $43 million reduction in collectable taxes and a concomitant reduction in services (see "Frist Do No Harm - Impact of TIFs - Marion County As a Whole")

On Monday night the Council is set to consider Prop 15, which seeks to expand the consolidated downtown TIF in two directions - to the east by 112 acres to finance development on 0.8 acres and to the west by 604 acres to finance development on a couple of blocks.

Shouldn't the impact of current TIFs be considered before more TIFs are piled on?  Unfortunately for all residents of Marion County, but particularly for those in Center and Wayne Township, Councillors did not ask a single question about Prop 15 at the August 27 meeting of the Metropolitan & Economic Development committee meeting.  It was an appalling affair for many reasons.  And the lack of prudent public representation was part of the reason it was appalling.

There is a huge impact on Wayne Township due to the existing TIFs.  Of all taxable property in Wayne Township, 10.9 % is in a TIF district increment and all property taxes flow to the TIF fund and not the schools, libraries, etc.

• for Speedway government and Speedway schools, 19.1 % of total property value is in a TIF
• for Wayne Township government and Wayne Township schools, 9.5 % of total property value is in a TIF

All of the Marion County TIF districts cause a combined

• $175 thousand increase in circuit breaker penalty to the Town of Speedway
• $20 thousand increase in circuit breaker penalty to Speedway City School Corporation
• $1.7 million increase in circuit breaker penalty to the Wayne Township government
• $3.4 million increase in circuit breaker penalty to the MSD Wayne Township School Corporation

There are 6 older and 1 new TIF district in Wayne Township.  None of them have a zero value for the base.

Of the 6 older TIF districts, there was a combined transfer of $118 million from the base to the increment.   Meaning that property taxes from $118 million of property value that was promised to always go to the schools, fire department, etc, is now transferred to the TIF so that it will now and forever be deposited in the TIF fund instead.

• $5.5 million of the amount transferred out of the base was in a Speedway TIF
• $112.9 million of the amount transferred out of the base was from TIFs within Wayne Township, but outside of Speedway.

This is a significant draw down.  The transfer of property value out of the base amounts to 4.4% of the property Wayne Township schools rely upon for funding and 2.0% of the property Speedway schools rely upon for funding.  The impact will be felt in increased taxes and increased circuit breaker penalties.

While very little of the proposed expansion of the downtown TIF appears to be in Wayne Township (the available map is grainy and very difficult to read), its impact needs to be viewed in light of existing conditions within Wayne Township and the impact of existing TIF districts on taxpayers and governmental units.

The 800 Pound Gorilla - Indianapolis Airport (Part 2 - More than a parking facility)

Central Indiana certainly needs a goodly sized airport.  There are attendant difficulties forced on those in Decatur and Wayne Township, Marion County, that are necessary for an airport to exist.  We understand that, and by and large accept the burden placed on us for the greater good.  However, I have always felt that the burden placed on Wayne, Decatur and parts of Hendricks County, should be limited to only the burden that is absolutely necessary.  In a future entry I will detail how, in recent years, the Airport has moved beyond what is necessary and now wishes to impose unnecessary hardship, not only on our side of town, but to a real extent, all over Marion County.  But, for this entry, I want to focus on the impact of Airport operations on Decatur and Wayne Townships.  I am not familiar with the ins and outs of impacts on neighboring Hendricks County, but assume their story will be similar.  And, of course, I know far more about the details of Decatur's issues than those of Wayne.  Long story short, assume as you read this, that the burden on Wayne Township is quite similar to that on Decatur, but I will have fewer exact details as to where those impacts are located precisely.

The Indianapolis Airport grew over the decades to what we see today - a 7700 acre government run aviation operation that includes land actually used for aviation purposes, banked land for future expansion, and accumulated land not needed for aviation purposes.  In the late '80s, the Airport instituted a residential buyout program for single family homes that fell within certain noise contours of the airport that were deemed by the FAA as imposing too much of a burden on the families that resided there.  The FAA finances these purchases, they do not come out of Indianapolis' operating funds.  The Airport uses actual noise monitor readings and computer projections to establish the noise conture lines.  Those homes within a calculated decibel contour line are automatically able to participate in the guaranteed purchase program.  Nobody is forced to sell, but when they are ready to do so, they have a willing buyer.  I have never heard anyone complain about the purchase price that the airport offered for a home in this program.

Land uses around the Airport and within the noise abatement program areas, may not include single family residential uses.  Any other use is not prohibited, although building height restrictions are imposed, with the height limit dropping as you get closer to the end of a runway.

For a number of years in the late 80's and early to mid-90's, Decatur Township saw its population and total assessed value actually drop due to the purchase of so many of our homes and the property's removal from the tax rolls.  I am trying to locate more recent data, but what I can tell you is that between 1972 and 1988, the Airport grew from 1200 Decatur acres to 2150, consuming over 10% of our Township land area.  And that was just before the big buying spree from the noise abatement program.

Ever since that buyout program, there has been a continual tug of war with the Airport to return land to the tax rolls.  The Airport was stubborn back then, but not totally unyielding - unlike today when I am not sure they give any thought to what is in the best interest of the surrounding community.

The mid 90's saw the now infamous $300 million United Airlines Maintenance Facility built on the north side of the Airport, in Wayne Township.  At the same time, to pay for Indy's portion of the costs ($100 million), extraordinarily large land areas of Decatur and Wayne were established as TIF areas.  I have uploaded a scan of the different areas that comprise the consolidated Airport TIF.  The dashed line running on the north side of TIF area 241 is the Township line dividing Wayne and Decatur Townships.  Thousands upon thousands of acres of Wayne and Decatur Township have been siphoned off to pay for Airport debt for the United deal.  When you hear Airport officials talk about how they do not take property taxes, please remember all of the property taxes being contributed to their TIF to pay for their United debt.

Almost all of the land mass of Ameriplex Industrial Park lies within one or another of these Airport TIFs.  Almost all of the existing buildout of Ameriplex is within the TIF.  After all of these years, we finally have two hotels, one warehouse, and the corner of another that are outside the TIF and contribute taxes to our school district and Township government.  Because we have few businesses outside the TIF, our tax base is skewed to the homeowners of Decatur.

Ameriplex was envisioned by Civic leaders in Decatur in the late 80s and early 90s.   It was hoped that, like Pike Township had done with Park 100, building an industrial park would help our Township grow and prosper.  There were 1100  acres along the south side of I-70 that were then being used for farming.  The frontage would have the type of exposure sought by business headquarters.  But as plans developed for Ameriplex, the Airport and then Mayor Goldsmith forced a land swap.  The prime frontage would have to be sacrificed to the Airport so they could land bank 100s of acres for a future 3rd parallel runway - for the anticipated exclusive use of FedEx.  The Airport would bundle the property it had been buying through the noise abatement program and swap it to form the current Ameriplex outline.

So, withing a 10 year period, Decatur lost population and property to the Airport through the noise abatement program, was hobbled by the establishment of the Airport/United TIF that utilized Township services but did not contribute property taxes to cover the costs, and forced to accede to a land swap that simultaneously guaranteed further future intrusion by a 3rd runway and a downgrade to the prime real estate location for Ameriplex.

Planned for some years, a new midfield terminal opened in 2008 on the west end of the Airport proper, within Decatur Township.  The facility is reported to be 1.2 million square feet and cost almost $1 billion to build.  The public was told, prior to the decision to build the new terminal, that airline landing and docking fees would cover the debt service on the bonds.  The Airport Authority is backing down from that promise so that they can charge the airlines lower fees. 

Meanwhile, the old terminal, parking lots and car rental lots on the east end of the Airport, stand idle and unkempt.  The Airport is not planning on turning any of these hundreds of acres back to the tax rolls, where they would do Wayne Township some good.  Instead, the Airport has grandiose plans to help itself to revenue from that property, even though it is no longer useful for aviation or aviation support.  This should be recieving far more scrutiny by the public and government officials than it has.  I will elaborate on this issue in the near future.

[part 1 - http://hadenoughindy.blogspot.com/2012/02/yesterdays-zoning-case-its-about-far.html]