Jasper Redevelopment hears Central TIF revenue increasing for foreseeable future

The Jasper Redevelopment Commission learned that the Central Tax Increment Finance district, or allocation area, would capture about $871,000 in revenue in 2024 and continue to increase to $1.5 million by 2033.

This, along with overviews of the city’s two additional TIF districts, was part of an annual presentation the city must hold for overlaying taxing units. Baker Tilly, the city’s financial advisory firm, provided the report during the commission’s monthly meeting.

TIFs are special areas that support economic development according to a plan established when the district is created. A base assessed value is established at the time the district is created, and new tax increments created by improvements to the business property in the area can be captured by the district to support the economic development plan associated with the district.

As assessed values have increased, the base assessed value rate has increased as well and remains available to the overlapping tax units. However, the district still captures the increasing increment from the improvements to the properties in the district.

The City of Jasper is using TIF revenue to pay for the new outdoor pool and is exploring using it to fund the Regional Wellness Center as well.

Matt Eckerle, a principal with Baker Tilly, noted that it was important to understand the city has no bearing on the assessed value decisions at the assessor’s office. “The assessor is going off of state guidelines,” he said. “I know that’s a very hot topic lately around the state, and I’m sure the mayor and Renee (Kabrick) and the rest of the city administration wants to make sure that everyone knows that they’re not dictating the assessment of anyone’s property.”

By law, the city must give this presentation for all the overlapping tax districts or tax units impacted by the TIF district. In this case, that includes Greater Jasper Consolidated Schools, City of Jasper, Jasper Public Library, Huntingburg Airport and the county.

Before the presentation began, board member Steve Lukemeyer, who also serves on the Greater Jasper Consolidated School Corporation Board of Trustees, asked the firm if they could provide data on the TIF’s impact on the overlapping tax districts.

Eckerle said they could examine the impact, but determining those amounts would take an intense study. He added that due to the state circuit breaker for property tax relief, it wouldn’t necessarily be a dollar-for-dollar transfer from one entity to the other.

“It’s, unfortunately, not as simple as saying the TIF captured $100,000 in year X and the school is 35 percent of the tax rate; okay, that’s $35,000 that would have gone to the school,” Eckerle used as an example. “Because of those maximum levy limitations, the school would have got whatever the levy was less the circuit breaker amounts.”

He told the board they could calculate the cost of completing the study and return it to the commission for consideration before proceeding.

Jasper has three tax increment finance allocation areas: the Central Allocation Area, created in 2014; the Jasper Riverfront Allocation Area, created in 2015; and the University Heights Allocation Area, created in 2021.

The Central Allocation area is a large district encompassing most of the city’s manufacturing and industrial base. It collected about $699,000 of tax increment in 2023 and is expected to increase to $871,00 for 2024 and $976,000 in 2025. According to Kyle Carlson, a Baker Tilly associate, by 2033, that amount will be about $1.5 million captured. He explained the driving factor for the increase is the tax abatements rolling off in the coming years.

According to Eckerle, the report’s estimates did not include any natural growth in the area, such as new construction. “This is just what’s in the ground now,” he said. “We feel this is a good conservative estimate.”

The Central Allocation Area is paying for the $8.5 million bond for the new outdoor pool, which matures in 2033. Earlier in Tuesday’s meeting, the commission approved the first payment to the bond.

The Jasper Riverfront Allocation Area, established in 2015 to support the River Centre development, captured about $474,000 in TIF funds in 2023. Some 95% of this, around $450,000, is pledged to repay the three bonds issued for the project. In 2024, that amount is expected to be about $467,000; and in 2025, $472,000. Carlson noted the TIF is capturing more than enough to cover the bonds as it was designed to do. The 5 percent kept for the city is used for administrative fees.

The newest University Heights Allocation Area, formed in 2021 for a new apartment complex near VUJ, is estimated to generate $77,000 in TIF in 2026 once fully built out. A majority of the TIF increment generated by the project is allocated to support the engineering, land preparation and infrastructure improvements for the project for $647,000.

At the meeting’s conclusion, the commission approved a determination that there is no excess assessed value to be shared with other taxing units for 2024 taxes payable in 2025, keeping all TIF revenues dedicated to the respective district projects.