Chesterton Tribune

 

 

Updated TIF impact report says Duneland schools could lose $5 million over 20 years

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By JEFF SCHULTZ

Cender and Company executive Dan Botich submitted a redo of the financial impact study he presented to the Porter County Redevelopment Commission last Thursday examining the possibility of a tax increment finance district at the Porter Regional Hospital in Liberty Township.

Initially Botich’s report listed the gross assessment of the hospital in Liberty Twp. at $37,336,400 with estimated net tax revenues of $3.7 million over the 10-year abatement period.

Based on that assessment, Botich had also estimated the tax increments going to the RDC would be $2.8 million capturing the roll-off from the abatement at the end of ten years and eventually taking in a total of $8.4 million by 2033.

With the $37.3 million assessed value, an estimated $1,620,700 that would have gone to the Duneland School Corporation’s capital project fund over 20 years would instead be captured by the TIF for county projects.

However, Botich’s new scenario uses a $100 million assessment for the hospital, which he believes is a more accurate AV for the facility. With the new number, the impact to the the school capital project fund would be $4,976,200 over 20 years.

Still, commission members have said they would like to see all the money returned to the school.

Legal advisor Gregg Sobkowski said a new provision in the state statute gives the RDC the ability to use up to 15 percent of the captured tax increment for schools, colleges or job skills training programs.

Sobkowski has said the RDC can “close that gap further” by funding other capital projects that would benefit the school district.

The estimated 20-year tax increment revenues collected by the RDC exclusively from the hospital property are $25.9 million, according to the new calculations.

Meanwhile, the revised report estimates the impacts on the County Bridge Fund at $74,500, the Airport Building Fund at $29,780 and the Liberty Twp. Fire Dept. fund at $184,630.

Sobkowski said that unlike educational institutions, the statute for TIF does not offer a way to carve out an exclusive portion of tax increment funds to give back to other cumulative funds.

The projected impact for each non-residential parcel in the Liberty Twp. taxing unit would be $52.09 per $100,000 of AV with just the abatement; for the Chesterton-Liberty Twp. unit, $40.85; for Pine Twp.-Duneland Schools, $36.24; and for the Town of Porter-Westchester Twp., $35.06 per $100,000 of AV.

The County is currently working on accurately assessing the hospital and hired a firm to do an appraisal late last year.

RDC member Jim Polarek said he has heard the value of Porter Hospital is closer to $200 million, meaning the impact would be doubled.

Botich said the RDC can capture all the roll-off from the hospital abatement. The board can determine how much assessed value it wants to use for projects and any excess will be reported to the county auditor by July 15.

The excess will then be distributed as AV to the taxing units.

Tax increment funds can be used to stimulate economic development by making improvements to the local infrastructure and for payment of principal and interest on bonds to pay for the improvements, Botich said.

 

 

Posted 4/23/2013