Jasper Redevelopment Commission gets update on TIF funds
You should read this if you wonder how the City of Jasper is paying for some of the larger projects it has either underway or in the works.
You may have heard about Tax Increment Financing Districts, or TIF, recently. Essentially, TIF is designed to allow government units to capture new property tax revenue to help entice new development in underdeveloped areas.
When a TIF district is created, a base value is declared for the district. For example, let’s say a property is valued at $100 at the time the TIF is created. For normal taxing purposes (taxes split between the government units in a given area like the city, school, county and other services like an airport) the property remains valued at $100.
However, any new tax revenue created by the increased value of properties due to development in the district is then captured and used to benefit the district, as determined in an economic development plan.
So, if that $100 base value increased to $150, the taxes paid on the additional $50 in value are captured by the district to be used as necessary to support that plan for the district.
As an additional note, these taxes are not paid by single family residences in the TIF district, although multi-family unit (apartments, duplexes) property taxes are collected in the TIF.
A common criticism of TIF districts is that it cuts those incremental tax funds off from other taxing units that would benefit from them. Although, annually, the redevelopment commission set to admister the funds has an option to adjust how the funds captured can be shared.
Now, let’s talk bigger numbers.
In 2014, the Jasper Common Council approved establishing the Central TIF District, which encompasses a large portion of the city’s industrial area.
Here is a map of the area; it’s in the green outline.
The Clerk-Treasurer must report on the city’s Tax Increment Funding (TIF) districts annually and then files the report online at Indiana Gateway. If you click on the link and then tap Dubois County, you can see information on the 10 TIF districts in Dubois County. The listing also includes the assessed values (base, net, and gross) and the increment captured for each of the TIF districts for 2022.
Jasper Clerk-Treasure Kierstin Knies provided the 2023 fiscal report at March’s regular meeting of the Jasper Common Council and then updated the Jasper Redevelopment Commission at Tuesday’s regular meeting.
The Central TIF was established in November of 2014, and revenue is being used to pay for the new outdoor pool complex that was built where the Municipal Pool was located. Work began on that project last week.
Knies reported that the Central TIF captured $778,000 in property tax revenue in 2023, which is about $250,000 more than in 2022. It is projected to increase to about $900,000 in 2024.
The district had about $1.7 million in funds at the end of 2023. A portion of that was used to support the pool design (about $160,000), offset the unexpected increase in the cost of the new pool (about $550,000) as well as professional service fees and the annual $25,000 funding for Heart of Jasper.
The Central TIF area increment is also being tapped to support the creation of the Regional Wellness Center. In addition to the TIF, the “financial stack” for that project also includes a capital campaign, state grants, the food and beverage tax funds, and other grants.
Knies also reported on the other two Jasper TIF Districts during the meeting. These were created to support specific projects.
The Riverfront TIF was created in October 2015 to support the property encompassing the River Centre and hotel. It collected $480,000 in increment revenue in 2023, which is about $264,000 more than in 2022.
The University Heights TIF was created in April of 2021 to support the creation of apartment complexes and further development in the area near VUJ’s campus. This did not collect any revenue in 2023.
During the discussion at the Redevelopment Commission Meeting, City Attorney Renee Kabrick mentioned that the city was considering utilizing a residential TIF to support more residential development. Indiana didn’t originally allow residences to be included in TIF districts, but in response to the need for more housing, it created an avenue for communities to use TIF to support residential development.
In 2023, state legislators also made it easier for cities to create residential TIFs by removing requirements for approvals from the Department of Local Government and Finance and local school boards affected by TIFs. These new changes are in effect until 2027.
One side note: Huntingburg was the first community in Dubois County to create tax increment finance districts, and currently, six districts support various industrial projects.
