Council Sends Prop 15 Back to Committee

Before the meeting officially began this evening, City-County Council President Maggie Lewis approached the microphone and announced that the Council would be sending Prop 15 back to committee.  She framed it as in the best interest of fairness.

Whew !  Given the politics of the situation, this was the best we could hope for tonight.

The new Chair of the Metropolitan & Economic Development committee, Leroy Robinson, will gavel his first committee meeting to order next Monday, September 24, at 5:30 pm.

Community Activist Files Lawsuit to Stop Prop 15

From a press release just issued by attorney, Paul Ogden:

Contact Person:   Paul K. Ogden, Attorney at Law

317-297-9720 (office); 317-728-6084 (cell)  pogden297@comcast

Date:          September 17, 2012

Private citizen Clark Kahlo today filed a lawsuit asking that a Court put the brakes on the expansion of the Downtown tax increment financing district.

Kahlo's lawsuit claims that a city ordinance requires that tabled motions be removed from the table within six months or they are considered dead and have to be removed from the list of pending proposals.  Proposal 15, the downtown TIF expansion proposal which includes Massachusetts Avenue, was tabled by Councilor Vop Osili at the February 6, 2012 meeting of the Metropolitan and Economic Development Committee ("MEDC") and not taken off the table until the August 27, 2012 meeting of the MEDC. The lawsuit alleges that the Proposal is dead and that it is a violation of the ordinance for the full Council to consider the Proposal at tonight's meeting.

The lawsuit also notes the MEDC failed to hold a vote on an amendment to the Proposal 15, which amendment reflected a backroom deal to gain the support of additional counselors for the expansion.

Attorney Paul Ogden, who filed the lawsuit on behalf of Mr. Kahlo, noted the short period of time before the Council's meeting tonight saying:  "I hope that Council President Lewis will do the right thing and pull the proposal from consideration.  In light of the City's ordinance limiting tabled motions to a life of six months, if the Council passes Proposal 15 the measure will be in legal limbo.  The right thing to do is to remove the measure from consideration and have the councilors supporting it to reintroduce it if they so choose."

Proposal 15 seeks to expand the consolidated downtown TIF in two directions - to the east by 112 acres for the purported purpose of financing development on 0.8 acres on Massachusetts Avenue and to the west by 604 acres to finance the development of a couple acres near the old Bush Stadium.

The lawsuit notes that many of the 45 TIF districts in Indianapolis are underperforming and take property taxes away from schools, libraries, parks and public safety.  The lawsuit also discusses that the Indianapolis-Marion County Tax Increment Financing Commission found that there is little transparency and oversight when it comes to the Indianapolis TIF districts. The Commission's several recommendations regarding the creation of TIF districts are on the agenda to be introduced at tonight's meeting.

It should be noted that Prop 16, introduced on exactly the same day and tabled on exactly the same day, has been pulled from the list of pending proposals, as required by Council rules.

 

You can read the court filing by clicking here.

TIF Fact #9 --- Most TIF Districts Underperform County As a Whole

I sent the following email message to all City-County Councillors, select media representatives, and Senator Luke Kenley.

Of the 40 TIF districts with a track record in Marion County, 25 underperformed the County as a whole in 2012 when growth in property values are considered.  Two years ago, 23 underperformed when compared with the County as a whole.

For the pay-2013 tax year, assessed values in Marion County grew a tiny, but positive, 0.8%.

25 of Marion County's TIF districts lost value and underperformed the County as a whole.  15 gained value and outperformed the County as a whole.  Taken all together, the County's TIFs did about as well as the County as a whole.

The consolidated downtown TIF was the 'winner', with a 10.5% increase in assessed value.  The consolidated airport TIF lost 17.8% in assessed value.  All TIFs combined except the downtown TIF showed a loss of 3.8% in value.

Have you requested financial predictions on the growth of the expansion areas being proposed for the downtown TIF?

The Council should demand full disclosure before Prop 15 or any other TIFs are considered.  Otherwise you won't know what you are voting on.

Citation : TIF neutralization forms filed by the Marion County Auditor with the Indiana Department of Local Government Finance for pay-2013

TIF Fact #8 --- 20% of IPS Taxing District Contained Within a TIF - How Much is Prudent?

I sent the following email message to all City-County Councillors, select media representatives, and Senator Luke Kenley.

At some point too much taxable property contained within TIF districts is too much and will cause irreparable harm to the taxing units and the services they can provide due to a crippling increase in circuit breaker penalties. 

22.0% of all taxable property in the IPS taxing district is contained within a TIF.

How much is prudent?

For pay-2013, IPS faces a circuit breaker penalty of $15.2 million.  That's a lot of money left on the table - money IPS qualifies for, but cannot collect due to the property tax caps.  How much of that is due to such a huge percentage of property value locked down in TIFs?

In a city that claims to value a better education for its children, do you know how much TIFs impact the circuit breaker penalty faced by IPS and therefore cause a cutback in services that IPS is able to provide to the children? Do you know the impact of expanding the consolidated downtown TIF by 716 acres (1.1 square mile)?

The Council should demand full disclosure before Prop 15 or any other TIFs are considered.  Otherwise you won't know what you are voting on.

Citation : TIF Study Commission Report, Appendix 2, part 1 - page 4, impact of homestead credit elimination on taxing units by Jeff Spalding, City Controller

TIF Fact #7 --- 33.3% of Taxable Property in Center Township is Contained Within a TIF - How Much Is Prudent?

I sent the following email message to all City-County Councillors, select media representatives, and Senator Luke Kenley.

At some point too much taxable property contained within TIF districts is too much and will cause irreparable harm to the taxing units and the services they can provide due to a crippling increase in circuit breaker penalties. 

33.3% of all taxable property in Center Township is contained within a TIF.

How much is prudent?

Have you asked for the impact of expanding the consolidated downtown TIF by another 716 acres (1.1 square miles) on the percentage of taxable property in Center Township contained in TIFs - as well as a projection over the next few years of that impact?  Do you know how much is prudent?

The Council should demand full disclosure before Prop 15 or any other TIFs are considered.  Otherwise you won't know what you are voting on.

Citation : TIF Study Commission Report, Appendix 2, part 1 - page 4

TIF Fact #6 -- 5 of 6 TIFs Comprising the Consolidated Downtown TIF Have Seen Their Base Driven to Zero Value

I sent the following email message to all City-County Councillors, select media representatives, and Senator Luke Kenley.

Even the much touted consolidated downtown TIF has seen the base of 5 of the 6 component districts driven to zero value (there is also one new TIF district that does not have a track record and therefore is not included here).

Take home lesson - even when a district pulls a $10 or $20 million 'profit' every year, the base is not restored.

Have you asked for any protection of the base of the proposed expansion of the downtown TIF?

The Council should demand full disclosure before Prop 15 or any other TIFs are considered.  Otherwise you won't know what you are voting on.

Citation : TIF neutralization forms filed by the Marion County Auditor with the Indiana Department of Local Government Finance for pay-2013

TIF Fact #5 --- 16 of 40 Marion County TIFs Have Seen Their Base Driven To Zero Value

I sent the following email message to all City-County Councillors, select media representatives, and Senator Luke Kenley.

The fairy tale that property taxes from the base before a TIF district is established will continue to flow to the schools, libraries, and other taxing units after the TIF is created is a potent tale.  As noted previously, it is simply not true.

For the pay-2013 year we now have 16 of 40 TIF districts (the older districts with a track record) whose base has been driven to zero.  Two more bit the dust this year.   They send no property tax revenue to support schools, libraries, fire departments, IndyGo, Health & Hospitals, or even City and County government.

Have you asked for the initial size of the base for the proposed expansion of the downtown TIF?  Have you asked why development already slated to occur over the next two years is being excluded from the base?  This surely is not development that will be spurred by the creation of a TIF.

Citations : TIF neutralization forms filed by the Marion County Auditor with the Indiana Department of Local Government Finance for pay-2013

The Council should demand full disclosure before Prop 15 or any other TIFs are considered.  Otherwise you won't know what you are voting on.