Council member Dan Whitten, D-at large, reacted to a new TIF report at the
start of Tuesday’s Council, voicing his long-standing opposition to tax
increment finance districts.
the 2018 TIF Neutralization report given by the County Auditor’s Office
earlier Tuesday that shows TIF areas are claiming a total of nearly $800
million in assessed valuation, which he says is “lost” by the County.
“I have called that
a backdoor tax for a long time. We are losing future revenue and we are
seeing tax rates either not go down or be driven up because of TIFs. That is
a fact,” Whitten said. “When someone comes in and hollers about their tax
rate, someone might want to redirect them to TIFs because, although our
County portion of tax rate has gone down in years, people are seeing
increases in their taxes and TIFs are part of that problem.”
agreed Council member Sylvia Graham, D-at large.
Auditor Vicki Urbanik said the total AV in TIF districts according to the
latest neutralization report is close to $779 million. That is $37 million
more than this year, she said.
The pros and cons
of TIFs have been a reoccurring debate topic in local government because of
the revenue that gets shifted for specific developments by redevelopment
commissions, away from general tax levies.
According to the
Indiana Department of Local Government Finance, a baseline property value is
set in the TIF district by the redevelopment commission. Any property taxes
collected at or before the baseline go to the taxing unit while any tax
revenue from commercial and industrial property above the baseline, known as
“incremental assessed value” is directed to the redevelopment commission.
Property tax rates
that are adopted and approved for the civil taxing units are applied to the
total value in the allocation area.
Karen Conover, R-3rd, questioned Whitten’s points, asking how money is being
lost since taxes are being collected for redevelopment.
“We haven’t lost
anything. It’s the value of the land. We are getting the same thing we got
before,” said Conover. She said that redevelopment commissions can grant TIF
revenues to other taxing units like schools.
Whitten said the
report shows that almost $800 million of AV is being captured by TIF
districts and that it seems to him that redevelopment commissions don’t do
what they are supposed to do with the revenues, which is to improve
infrastructure in areas that need it. Whitten cited areas in South Haven as
an example hat could benefit from TIF, but no TIF district has been
developing in areas that are not in a TIF district, so to say that Porter
County is an area that needs a ridiculous amount of TIFs shocks the
conscious. It’s an absolute insanity,” said Whitten.
Council member Jeff
Larson, R-at large, said he agrees the topic needs to be discussed but said
he would argue the impression that there is no tax revenue being generated
by the properties in a TIF is a fallacy. He said he believes there are some
areas where a TIF district would work “extremely well” like South Haven, and
that TIFs are attractive to people who want to develop here.
Urbanik said a copy
of the neutralization report has been uploaded to the Indiana Department of
Local Government Finance’s Gateway system. The report was done in-house,
which is a savings of $20,000 to the County, she said.