Jasper’s proposed tax district creates questions and concerns

Officials with several government units affected by a proposed tax-increment finance district were in attendance at Wednesday’s Jasper Common Council meeting.

Concerns that the proposed district encompassing a majority of Jasper’s industrial base would detrimentally impact the revenues for those taxing entities have elected officials interested in the process.

Representatives from the Dubois County Commissioners and Council, Huntingburg Airport, and Jasper Consolidated School Corporation were on hand to hear about the proposed area and make comments.

Mayor Terry Seitz and the Jasper Redevelopment Commission have been examining the application of a TIF district in the city to pay for an estimated $18 million in improvements in the city. Those improvements include the items listed in the Downtown Master Plan, The Parklands, a potential parking garage, fiber optic connectivity to all the city buildings, work on the Patoka River to fix sediment and erosion issues, completing the Riverwalk connection to St. Charles, and expanding the arts department to have a greater downtown presence.

These projects are expected to take ten or more years to complete.

TIF districts are designed to capture the increased property taxes of an area created by improvements and developments in the area. Here is a guide to how TIF works.

Concerns raised by the entities that attended Wednesday’s meeting were based around the size of the district, length of time the TIF district is in effect, and who would control the funds captured.

The proposed district encompasses the majority of the city’s industrial base from 36th Street to south of 100W. The district runs along the Patoka River and includes the downtown area as well as the Jasper Cabinet building and the proposed Shovel-ready site on Jasper’s south side.

Here is a map of the proposed area.

The large area includes all the properties and projects that have been abated for the next 8 to 10 years. These abated properties to date — minus the recently approved abatement on the Inwood building purchased by Braun Family Properties LLC. — will withhold about $4.3 million dollars in property tax revenue from being collected over the life of the abatements based on the current tax rate. <edit>

Those property taxes will begin to roll off the abatement in 2018. Stens and Indiana Furniture Industries were the first two companies to apply and receive tax abatements under the new ordinance in 2011.

The  impact of the current abatements over the 10-year period on the revenue of the affected taxing units is estimated to amount to $2,041,590.16 for the Jasper School Corporation; $1,477,513.45 for the City of Jasper; $629,335.59 for Dubois County; $129,955 for the Jasper Public Library; $15,564.62 for the Dubois County Airport Authority; and $11,064 for Marion Township. That is money those entities won’t receive over the ten year life of the property tax abatement.

If the TIF proposal is approved, the district created will begin capturing the increased taxes created by the abated and improved properties that occurred after March of 2015. According to the tax impact study completed by Umbaugh and Associates, as those property tax abatements roll off the district will collect about $164,000 annually from the $7.1 million in increased assessed value.

These are the only numbers being used to create estimates for the impact of the TIF district, although assessed values of properties can fluctuate over a period of time. Additional improvements created by TIF funds would also impact the assessed values of the properties within the district.

“The abatement has worked well,” Councilman Kevin Manley stated today. “Do we need another tool in our toolbox?”

Opponents to TIF point out they usually lead to government entities having to raise tax levies in other areas to compensate for the increased demand on services as the improvements occur in the areas the newly created taxes are being captured by the TIF fund. Increases in police, fire, and utility services will have to be paid for from other sources or increased taxes.

“In order to get that money (TIF funds), you have to take it from somebody else that would be getting those funds,” Dubois County Council President Greg Kendall stated at the meeting. “I’m concerned about that.”

Attorney Rich Starkey of Barnes and Thornburg of Indianapolis and consultant Ed Curtin of CWC Latitudes of Columbus dissuaded those concerns stating the amount of money entities lose would be minimal.

Curtin was hired by the redevelopment commission to assist in examining the creation of the TIF districts in April.

Starkey is bond council for the beleaguered Carmel Redevelopment Commission. The redevelopment commission in Carmel utilized TIF to quickly turn the city into one that regularly makes Forbes magazine’s top places to live in the country. But, a recent report indicated the over $486 million debt the commission has created for the city of about 85,000 to achieve that designation will likely lead to them having to seek other sources to pay it off after the TIF districts expire. A recent Umbaugh report conflicted with that assessment by the city’s clerk treasurer.

Back to Jasper; City Attorney Renee Kabrick shared the estimates of what those entities could lose annually if the TIF district was created. According to Kabrick, the school corporation would lose about $23,000 annually, the county would lose about $2,000, and the airport about $250.

But, over the life of a TIF district — 25 years by statute — that would lead to $575,000 in tax revenue losses for the school corporation, Manley pointed out.

“I know our school board needs money. I know the airport needs money. There are a lot of entities that need money,” Manley said.

Another area of concern is who will be controlling the TIF funds. The Jasper Redevelopment Commission will be able to use those funds at their own discretion to bond against debt for the improvements that affect the district. The board is made up of three appointments by the mayor’s office — the majority — and two appointments by the common council. The school board has a non-voting board appointee as well.

The current commission has assured the council it would not be making decisions regarding the money without the council’s approval but according to Manley, he and other council members won’t know who will be the mayor or who will be on the redevelopment commission over the 25 year life of the TIF district.

The redevelopment commission would like to have final approval on the proposed TIF district by January meeting. Before that can happen, the Jasper Planning Commission and common council will have to approve the proposal. Then, a public hearing will be held and the redevelopment commission can take action on the confirmatory resolution to create the district.

Huntingburg utilized TIF funds created by their districts to assist in landing the Stellar Community designation. Here is a video of the positive impact of TIF on an Indiana community.