Budget Hearings This Week

There will be budget hearings on Tuesday and Wednesday this week.  The previously scheduled hearing for tonight's Metropolitan & Economic Development committee has been postponed until September 24.

Tuesday, September 11 -- 5:30 pm in room 260 of the city-county building
Admin & Finance committee

County Treasurer/Commissioners

County Auditor/Administrator

Noble of Indiana

Marion County Fair Board

Wednesday, September 12 -- 5:30 pm in room 260 of the city-county building
Public Safety & Criminal Justice committee

Department of Public Safety (Excluding IMPD & IFD)

Office of the Director

Homeland Security

Animal Care and Control Division

Communications

Most Marion County TIF Districts Underperform the County As a Whole

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.

Elimination of Homestead Credit - City Gains, Schools Lose

Mayor Ballard has suggested that the Homestead Credit given to Marion County homeowners be eliminated in order to help balance the City's 2013 budget.

While the City-County government stands to gain $8.6 million if the local Homestead Credit is eliminated from property tax bills, other units of government are not universally so lucky.  In fact, the public school districts in Marion County stand to lose a combined $3.5 million should the Credit be eliminated.

I have uploaded the analysis of the impact of eliminating the Homestead Credit to Google Docs.  This analysis was conducted by the City's Office of Finance and Management and sent to me by City Controller Jeff Spalding.

The local Homestead Credit (listed as "local property tax credits" on your property tax bill) is funded with $13 million of County Option Income Tax revenue.  Because of the distribution formula for COIT money, the lion's share of the Homestead Credit is funded by the City-County government.

If eliminated, those homeowners who have not reached the property tax caps will see an increase in their property tax bill equal to the amount of Homestead Credit they now get - which apparently ranges from zero to over $100, but typically less than $40.  The vast majority of homeowners who have hit the property tax caps, will see no change, as the tax caps will increase to cover the loss of the Credit.

Its the last part that causes the complications.  Property tax caps (also known as circuit breaker credits) are the property tax revenues that do not flow to the units of government, and that serve to reduce the amount of property tax money the unit does receive.  Each unit sets a budget and calculates the amount of property tax revenue it will need for the next year.  That amount of revenue is split among all property owners by the calculated tax rate.  When you hit the tax caps, the amount of your tax cap credit is deducted from the amount of money requested by the unit of government.  So, if they requested $10 million and their share of the property tax cap credits issued is $1 million, the unit only gets $9 million.

The analysis of the impact of eliminating the Homestead Credit looks at the gain in COIT money each unit will get because it no longer would be diverted to fund the Credit, and the loss of property tax revenues due to the increase in property tax cap credits ("CB" in the analysis) that would replace the Homestead Credit for many homeowners.

The net increase or decrease in revenues falls out like this:

City-County government -- increase revenue $8.6 million

School Corporations -- lost revenue $3.5 million

MSD Decatur  -- lost revenue $191,490
Franklin Township -- lost revenue $454,301
MSD Lawrence -- lost revenue $660,177
MSD Perry -- lost revenue $303,524
MSD Pike -- lost revenue $134,271
MSD Warren -- lost revenue $240,560
MSD Wayne -- lost revenue $332,732
Beech Grove -- lost revenue $ 70,713
IPS -- lost revenue $818,569
Speedway -- lost revenue $3,049
 

Township governments are mixed.  The three westside Townships, who still have their fire departments, would see increased revenue, while the rest would lose money.

Center -- lost revenue $11,061
Decatur -- increased revenue $40,623
Franklin -- lost revenue $19,085
Lawrence Tnsp -- lost revenue $7,273
Perry -- lost revenue 3,108
Pike -- increased revenue $221,706
Warren -- lost revenue $1,137
Washington -- lost revenue $8,467
Wayne -- increased revenue $282,500
 

The excluded Cities would see increased revenue, while the Towns would see lost revenue -- I'll leave you to click on the link for the exact numbers.

IndyGo would lose $254,781, the Indianapolis-Marion County Public Library would lose $428,227, and Health and Hospitals would lose $648,399.

I am hearing that the elimination of the Homestead Credit is receiving a tepid response in the Council.  The hit that the schools would take will not help improve the mood.

Budget Hearings This Week

The budget hearings continue with three hearings this week.

Tuesday :  Admin & Finance committee

Building Authority

Bond Bank and Debt Obligations

City-County Council and Clerk

County Assessor

 

 Wednesday : Public Safety & Criminal Justice committee

Marion County Sheriff – Civil, Jail, Executive, Support Services

County Coroner

Forensic Services Agency

 

 Thursday : Public Works committee

Department of Public Works

 

All meetings begin at 5:30 pm in room 260 of the City-County building.

WCTY Archive For Metro Development Committee

The WCTY archives now has the longer version of Monday night's Metro Development Committee meeting.  This clip begins as close as I can get to the Chairman gaveling the meeting into adjournment.

Marion County's TIF Districts See Base Erode By Nearly Half a Billion Dollars In One Year

 If you want to continue to believe the outright lies told to you about TIF districts, stop here and do not read any further.

After eroding $43 million in 2010, and less than a million in 2011, the combined assessed value of the base of all of Marion County's TIF districts dropped precipitously in 2012.  The pay2012 assessed value of all taxable property in the base was $1.56 billion.  The pay2013 value is down to $1.07 billion - a staggering loss to the base of $490 million or about a third.

All this while the assessed value of taxable property throughout the County increased a modest 0.8%.

This matters because the base is the property value you were told would always cast its property taxes to your schools and libraries and fire departments, and even the city-county government.  If this doesn't debunk that old lie, nothing will.

Two more TIF districts saw their base AV drop to zero this year; making a total of 17 of 40 districts to have achieved that status.

The TIF districts comprising the consolidated downtown TIF saw a minor gain of $261,618 in base AV.  However, the airport TIF base dropped an incredible $108 million, for just over one third of its prior value.  Congratulations Wayne and Decatur Township taxpayers.  This is a significant number that will cause your tax rates and tax bills to increase, while your schools will find less money in their stockings due to more people hitting the tax caps.

Services don't pay for themselves - taxpayers do.  We all carry the weight of this fiasco.

$489,761,569 drop in TIF base AV

staggering

precipitous

incredible

stunning

astounding

amazing

 

but true

I uploaded a copy of the forms filed by the Auditor this year to determine the new base values for all TIFs in Marion County.  I also uploaded a summary spreadsheet showing the districts and base assessed values that I created from the Auditor's forms.

What's Wrong With This Picture? - The Proposed Mass Ave TIF

Prop 15 proposes two expansions of the consolidated downtown TIF district.  A westward expansion of 604 acres, and an eastward expansion of 112 acres.  The latter is also known as the Mass Ave TIF, although about half of the acres are nowhere near Mass Ave.  The project area is less than one acre - by my calculations 0.8 acres, in fact.

But, see for yourself. 

I've actually been working on this for a few days and just waiting for one more piece.  I'll update you once I have secured that additional piece.  But, last night's maybe legal, maybe illegal, vote to push the TIF out of committee has hastened my schedule.  Helping me with information about the location of future proposed development has been Gary Welsh, author of the Advance Indiana blog and nearby resident.

I have uploaded all of these pictures in one document to Google Docs, so you can review them with as much zoom as you wish.



Proposed Mass Ave TIF - with Google aerial maps



Proposed Mass Ave TIF - outline

 

 

 

Proposed Mass Ave TIF - close up of East Area



Proposed Mass Ave TIF - close up of Mid Area



Proposed Mass Ave TIF - close up of West Area

The recommendations of the TIF Study Commission would protect the public interest by requiring disclosure of pertinent facts.  All of which would combine to address these questions:

Why this TIF?  Why this Place?  Why this Project?  Why this Footprint?

Its easy, once you see the outline of the proposed TIF, to want to know why a TIF is the best vehicle to fund the project?  Why not sell the block with the fire station and actually make money for the taxpayers to help build the new station?  Why not give the block away to the developer?

Why does the Mass Ave corridor require investment of public dollars at all?  The place is up and coming and a number of projects are already slated to begin within the next 12 months without a TIF and public dollars.

Why does this project need over 100 times its footprint to support it?  Or is the extra land included for other reasons, like setting up an extensive slush fund?  It is even said that the value of the already developed Trail Side project in the East Area will be immediately removed from the base (so current tax dollars will not continue to flow to the schools, library, etc) and included in the increment.

Indy's TIFs already cover 10% of Indy's property value.  It is irresponsible to pass this proposed TIF, or any TIF, without thorough evaluation and adjustment, if needed, or dismissal, if warranted.

[edited to add: I received a copy of the amendment to Prop 15 - it calls for excluding two properties from the TIF - 875 Mass Ave and 1201 Indiana Ave.  The former is the site of the Trail Side and the other is student housing next to the IUPUI campus.]