School corporation among taxing units concerned about Jasper’s special residential tax district
JASPER–On Tuesday, the Jasper Redevelopment Commission approved a resolution recommending the Tax Increment Financing (TIF) district for the Northridge Estates residential project, despite concerns from the Greater Jasper School Corporation and other taxing units.
The commission voted 4-1 to establish the 20-year TIF district. The TIF district will capture the increased assessed value of the properties as they are developed, and those taxes will be used to offset the cost of installing infrastructure to create the neighborhood. Kerstiens Custom Builders will pass along the savings to potential homeowners by reducing the cost of the lots by about $6,500 to $7,000.
The property tax flow-through is capped at about $1.1 million and only covers a portion of the developer’s estimated $5.1 million investment in the neighborhood’s infrastructure.
You can read more about Kerstiens’s plans here.
Concerns about the TIF were based on when it would expire. As that debt for the infrastructure rolls off, the city will continue to capture the property tax increment created by the improved properties until the TIF sunsets in 20 years.
Steve Lukemeyer, representing the Greater Jasper Consolidated Schools, addressed the long-term impact on school funding. Based on information from the city’s accounting firm, Baker Tilly, he estimated the school corporation would lose up to $200,000 annually once the development was complete.
Indiana schools rely on property taxes for operational expenses, including capital improvements, bus purchases, debt service, sports facilities, and other expenses unrelated to directly teaching students. Those dollars that follow the student go to pay teacher salaries and other educational expenses and can’t be used for operational expenses.
Lukemeyer pointed out that a housing development will likely increase student enrollment. “It sounds great,” he said, as the school gets the extra funding for the student enrollment. “We’re giving you more students, but we’re not giving you property taxes. It’s detrimental to us.”
The property tax dollars being captured by the TIF would not be available for the school to increase classroom sizes or take on the additional operational expenses of the increased enrollment.
He proposed the commission create the TIF with a sunset date reflecting the repayment of the infrastructure funds to Kerstiens.
Travis McQueen, Huntingburg Airport manager, presented a letter on behalf of several overlapping taxing units, echoing Lukemeyer’s concerns. The letter included three main points: 1) Upon capturing the necessary revenue, begin passing through excess tax revenues to the other taxing units; 2) Upon capturing the necessary revenue, begin releasing a portion of the increment to be included in the tax base for the county; 3) Allow the TIF to sunset or expire after the final payment for the specifically identified project. The letter is included at the end of the story.
McQueen also stated that the airport supports Jasper students by providing facilities for the Patoka Valley Career and Technical Cooperative Aviation program. He explained that the airport would like to partner with the city to continue supporting those programs.
In response to the questions and criticisms of the proposed TIF, City Attorney Renee Kabrick explained the length of the TIF was statutory. Still, it is revisited annually to determine what amounts could be allowed to pass through to other taxing units.
She added that due to the competitive nature of grants and other state programs, the city must use the available tools to fund projects, or they will not be considered for grants.
“Every day at the city level, we are faced with the idea that we have to do more with less, and that is why we’ve been given these tools,” she told the commission. “We’ve been told over and over again if we don’t use the tools we’ve been given, then don’t try to come and ask for a grant or anything else.”
The commission ultimately approved the declaratory resolution to create the TIF for the North Ridge Estates development.
Commission member Laura Grammer cast the lone dissenting vote, stating she felt the 20-year timeline of the TIF was unnecessary. She said that if it was a shorter timeframe, she would support it, adding that she believed the development would occur without the TIF in a 20-year timeframe.
Lukemeyer is a non-voting member of the board appointed by the school board.
The project will now move to the Jasper Common Council for final approval at its regular meeting, which will be held in the council chambers at Jasper City Hall on October 23 at 5:30 p.m.
