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March 06, 2017

Comments

Natacha

Perhaps those on the CCC would do well to look at California's experience with TIFs, which started there in the 1950's. On their face, a TIF, if properly used, would be a good idea. You take property that is unproductive, like an old factory building that is obsolete or long-gone bankrupt business, which is not contributing to the property tax rolls, you get someone interested in improving the property, and the City borrows by selling bonds. The developer uses the money to refurbish or rebuild on the property, and this is supposed to stimulate improvements to an entire blighted area. The loan is paid back by the increase in the assessed value of the property. The original amount of property tax, when the property was blighted, still goes into the tax coffers, but the increased value pays back the loan over the life of the TIF, usually 25 years. After that, the full increased property tax gets paid. If the project stimulates revitalization to an entire blighted area, then it is a win-win for everyone, including taxpayers.

The underpinning of TIF financing is that the area has to be blighted in the first place, and therefore, not eligible for conventional financing, and also so blighted that developers wouldn't want to risk their own money. This is how blight gets started, persists and spreads, so TIF financing is a good tool to stop and reverse this process, if TIF is used properly.

Problem is, that's not how TIFs are used. Developers all want the taxpayers to borrow money on their dime to finance their projects, so they come up with creative ways to argue that an area is blighted, including drawing TIF districts so large that more prosperous areas are included, and therefore, qualify for TIF financing. That's what happened in California. It got to the point that so much real estate was encumbered in TIF financing, and therefore property tax revenues were frozen in place for so long, that schools were in dire straits. Local governments refused to turn down campaign contributors, political supports, developers and others wanting the taxpayers to finance their projects, so then-Governor Swartzenegger issued an Executive Order banning future TIF projects. Gov. Jerry Brown extended it.

Indiana is not that far down the tubes yet, but we're headed there. TIFs are being abused, and the result of locking in property tax revenues for decades at artificially low rates is that as the cost for running schools, fire and police protection, etc. go up, someone has to cover these expenses. That "someone" is homeowners, primarily, but also small business owners, whose property taxes will also have to go up to cover the shortfall. Again, Marion County seems to be doing everything possible to make surrounding counties more desirable.

Kudos to Councilor Scales.

Natacha

Sunday's Star reported that Councilor Colleen Fanning had or does hold a position as a member of the Board of the Indy Chamber. This was news to me, as I don't recall this disclosure prior to the election in 2015. If she was on the Chamber Board before the election and didn't disclose this, that is a serious problem, in my opinion.

However, if she was placed on the Chamber Board after the election, that, too, is a serious problem, in view of the fact that she voted in favor of the Milhaus project, over very strong neighborhood objection, and also stumped in favor of Red Line, likewise over strong neighborhood objection. Service on the Chamber's Board is, IMO, a conflict of interest.

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