In what it considers to be its first major action since it was established midyear, the Porter County Redevelopment Commission (RDC) on Thursday put together a committee that will look at possible geographical boundaries for Tax Increment Financial (TIF) districts in the county’s unincorporated areas.

Its first task will be to start identifying which areas around the U.S. 6 corridor would be useful as TIF districts due to the construction of Porter Regional Hospital in Liberty Twp., which has been a direction the RDC has considered since its beginning.

The committee will meet at its own chosen time to study maps and determine where to place the boundaries of one or more TIF districts.

To join are Redevelopment Commission President Ric Frataccia, RDC members Dave Burrus and John Shepherd, and Plan Commission Executive Director Robert Thompson.

Once the areas have been drawn, the committee will take the documents back to the RDC, which will then recommend, or not, the proposed district to the County Council, which may suggest changes, and then to the Commissioners, who make the final decision.

“Let’s focus on one project at a time,” said Frataccia. The next project after the hospital will likely be the county’s municipal airport.

The committee will not be deciding pass-throughs as they will leave that up to the other reviewing bodies.

Shepherd said the center of the TIF district in proximity to the hospital could be between Meridian Road and Calumet Ave. on U.S. 6.

During the motion to form the committee, RDC member Jim Polarek, who is also the 4th District representative on the County Council, asked that a created TIF district not include any “footprint” of Porter Regional Hospital property.

He and other Council members, most notably President Dan Whitten, have said that the hospital should not be included in a TIF due to several remonstrations. Whitten had argued the idea of taking tax revenue from the hospital would disrupt the county’s tax collection processes after advantages were promised to the county in the discussions about allowing Porter to build a new hospital. Many officials have questioned the use of TIFs because they can take tax money away from school districts.

School’s general funds are supplied by a portion of the state sales tax but their transportation funds, capital projects funds and bus replacement funds are generated by property taxes.

Burrus said that from what he’s heard from the public, schools are the “number one concern” people have about TIFs.

Shepherd explained that changes in the TIF laws have given counties freedom to control how funds in a TIF district are collected including “pass-throughs” for schools and other local units like libraries or township fire stations. “Since then, it’s typical to exclude school corporations,” he said.

Shepherd said that captured assessments in a TIF district would not apply to any existing structures, meaning that only new buildings that come about after a district is set up are subject to the captured taxes. So, according to Shepherd, the hospital would not be affected if it were to be placed inside a TIF district. But everything developed around it would.

A financial advisor to local governments, Shepherd facilitated a discussion for his peers to become better familiar with how TIF districts operate.

A redevelopment commission can declare economic development areas to attract new business. If the County Commissioners agree to a TIF district or allocation area having met prior approval by the County Council and the Plan Commission, a baseline assessed value is taken for property taxes. Any value above the baseline would be collected by the RDC for development.

The only properties that TIF applied to are new commercial and industrial properties, Shepherd said, and taxes would be taken only from the AV of their buildings, not the AV of the land. TIF is not collected from residential properties.

Homeowners inside the districts should not see any changes in their tax bill due to “TIFing,” Shepherd said.

As it stands now in the legislature, all areas of a municipality are eligible to be economic development areas but that could change under new legislation, Shepherd said. The districts can be established for up to a span of twenty-five years.

The proceeds collected by the RDC are to be used for capital improvements or public works projects or to pay bonds and interest.

Shepherd said there are some misconceptions about TIF districts in Indiana because of news reports from Illinois. “Both states have entirely different rules,” he said. In Illinois, proceeds from a district can be directed to go to another, but in Indiana all proceeds must stay completely within the district.

County Commissioner President John Evans, R-North, was on hand to alert the commission that the County Jobs Cabinet this week has made their final report available on ways to increase economic development.

A presentation on the plan will be scheduled at the RDC’s next meeting on Jan. 17. The plan includes insights on developing properties around the hospital and at the airport.

Evans said both boards will complement each other by working toward common goals.

RDC members absent from Thursday’s meeting were Jeremy Rivas and non-voting member Ralph Ayres.