Having read the article about TIF districts in the current IBJ, that’s the way we’d describe the operation in Indianapolis/Marion County. Our guess is that the legislators who enacted the relevant law would probably not recognize the current structure
A brief recap. The original law demanded the establishment of a specifically defined geographic area needing redevelopment. If financed by municipal bonds, the increase in property tax revenues in the area resulting from the designated project would be used to pay off the bonded debt. Debt retirement would send those additional revenues to municipal coffers.
We seem to have lost our way.
One of the complaints about the system has been the insistence by public officials that revenues in a TIF district cannot be used elsewhere - that is for ordinary municipal expenses.
This report tells us however that it is a common practice to move funds from TIF district to TIF district, depending on how accurate the guess was about the additional revenue being available.
By not using funds immediately to pay outstanding debt, we see the amassing of huge slush funds which help out where the guesses were not accurate, and provide opportunities to help the right developers with the next project. We are told, "The bond bank has been able to make up the shortfall with surpluses from earlier years, or tapping related TIFs." (Our emphasis.)
"Surpluses?" What surpluses? Paying off the bonds more quickly would clearly direct more money, more rapidly, into the municipal till. A desirable happening, no? It might even help toward making up the "shortfall" in the current costs of public safety, parks and public transit, if one considers those items important to the general citizenry.
These projects and TIF districts are sold as "economic development" operations, implying eventual increased revenues for usual and ordinary municipal expenses. But public policy apparently is designed to prolong the outstanding debt to its maximum length. One wonders whether, through refinancing and other gimmicks, we might eventually wind up with projects having run out their life but with the principal debt still intact. Like our first football stadium?
We’re also puzzled by some of the geographic aspects indicated in the news story. There are several "consolidated" districts, with no reference in the paper as to how, why or when these consolidations took place.
In reference to the TIF district established for the United Air Lines boondoggle at the airport, it is indicated that, "It even reaches to the opposite side of town to include the former Naval Air Warfare Center at East 21st St. and Arlington Avenue."
Quite a stretch. If we were that flexible, our golf swing might be making us a little money!