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[s45] COLUMN by Sen. Smith: How Clark County’s Perpetual TIF Districts Impact Our Taxes
Start Date: 6/10/2013Start Time: 12:00 AM
End Date: 6/10/2013
Entry Description
"If you love taxes.....you'll love Clark County."

Have you ever seen that bumper sticker in Southern Indiana? I have, and I thought it would be a good time to discuss one of the "hard to see" taxes in Clark County that has contributed, in large part, to the tremendous tax burden our citizens face.  

You’ve probably heard of something called a TIF district. (TIF stands for Tax Increment Finance.) The concept of TIF districts was initially created as a tool for towns, cities and counties to pay for economic development projects within a community. Here’s how it works:

Once a community development project is planned, local redevelopment commissions can create a TIF district within the area to serve as a future funding mechanism. Future additional tax revenue generated in the district then goes directly back to the redevelopment commission to fund the project and pay back any debts incurred along the way. Once the debt has been satisfied, the new revenue should be returned to the tax base, resulting in a lower tax burden for everyone in the county.

When used correctly, TIF districts are a great way to improve areas of the community and encourage economic activity that results in lower taxes for our citizens. Unfortunately, in Clark County this process has been manipulated over the years due to vague language in state law that allows TIF districts to continue on indefinitely.

Instead of a TIF district ending once the initial project is fully funded, the TIF remains and the extra revenue generated – which is supposed to go back to the citizens in the form of lower taxes – continues to pour into the redevelopment commissions. The commissions then find new ways to spend these tax dollars above and beyond any debt service on the original project that established the TIF district. As a result, our citizens continue to be taxed at the higher rate, never seeing the tax relief that should come from these economic development projects.

Moreover, with TIF districts, residents may incur even higher tax rates to maintain the same level of funding for basic local government services such as schools, fire protection and libraries due to the taxable area of the county becoming smaller and smaller.

Clark County has the fourth-highest number of TIF districts in the state at 34. Marion County has the highest with 45. In addition, Clark County’s TIF districts generate the third-highest dollar amount at about $18.6 million, which is then diverted back to the redevelopment commissions.

Keep in mind, members of redevelopment commissions are appointed by local government officials, not elected by the general public. Besides appointing members, local governing units and fiscal bodies have little control over what a redevelopment commission does and how it spends those taxpayer dollars that are automatically funneled out of the tax base to these numerous TIF districts.

Over the past several years, I’ve worked with members of the General Assembly to try to modify the TIF statutes in a way that encourages a move back to the original intent of this local government tool – one that ultimately promotes growth and lower taxes.  

I remain committed to this goal and hope you will take the time to learn more about the impact of perpetual TIF districts in our community. Information on the various redevelopment commissions that manage the TIFs can be found through the Department of Local Government Finance’s online portal, here.  

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Contact Information:
Name: Molly Johnson
Phone: 317-234-9133
Email: mjohnson@iga.in.gov
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Entry Type:
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Entry Category:
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  • IN.gov Category:
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  • Agency Name
    Senate Republican Caucus

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