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Bill adds oversight to redevelopment commissions

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Despite opposition from cities and towns, the Indiana House passed a Senate bill Monday night that will mean more oversight of redevelopment commissions and force decades-old tax-increment financing districts to expire.

Senate Bill 118, approved on a 71-27 vote, is a victory for Sen. Luke Kenley, R-Noblesville, who for the past two years failed to get similar legislation through the House. The bill was authored this year by Sen. Pete Miller, R-Avon, and combined with related bills by Republican Sens. Greg Walker and Jim Smith.

The legislation will return to the Senate for concurrence.

The bill prohibits redevelopment commissions from issuing public debt greater than $5 million without approval from their local town or city councils.

“Senator Kenley feels strongly that when you’re making a significant obligation … you should have an elected official involved,” Miller said.

He said Kenley asked him last summer to carry a bill similar to one Kenley had filed in the past.

The Carmel Redevelopment Commission was the poster child for lax oversight until 2012, when the city passed a local ordinance that gave the Carmel City Council final say on the CRC’s spending. The CRC had issued millions in debt without council oversight, and the council ended up helping to refinance $184 million by pledging the local property-tax base.

Miller said the bill's limits on tax-increment financing districts caused "some heartburn" for cities and towns, including Greencastle, Brownsburg and Avon in his own district. There are 40 to 50 TIF districts around the state that were grandfathered into perpetuity by the existing statute. Under the bill, any TIF district created before 1995 now must be dissolved by 2025.

That means the incremental property-tax revenue that the districts captured for redevelopment will become available to local government units, such as schools and libraries.

“They just were never meant to be a perpetual funding source,” Miller said of TIF districts.

The bill contains an exemption for Indianapolis’ downtown TIF, Miller said, because it’s such an important economic-development engine. He added that Marion County has a history of sharing revenue from the downtown TIF district with local government entities.

Miller thinks the sunset date gives cities and towns enough time to leverage their pre-1995 TIF districts for one more round of debt.

“This gives them one more chance, if they want to make some investment in the next year,” he said.

Miller thinks the House passed his bill because members have realized that property-tax caps are eating into local-government budgets, contributing to school corporations’ inability to pay for bus transportation.

“This has taken a few years to crystallize in peoples’ minds. This is all interconnected,” he said.

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  • I understand this stuff quite well, thank you
    "Creating a better transit system actually focuses new development along transit lines." So goes the theory. Reality quite often is quite different. Portland's transit-oriented development experience required lots & lots of subsidy. Get your nose out of the clouds.
  • TIF Transit and Sprawl
    I'm not fully sure if you understand TIF. Tax increment Finance Districts are set up as a revitalization tool for economically depressed areas. This means that any business that takes the risk to develop in this area will see the new property taxes they generate kept in the TIF District. This helps to improve local infrastructure and create more for incentive new development. It works to help fill in missing and damaged teeth in the urban fabric rather than allowing the area to continue to decline and development to locate on greenfield sites. In therms of transit and sprawl, just because something runs out to the suburbs does not mean it is supporting sprawl. Sprawl is the continued spread of the suburb. Creating a better transit system actually focuses new development along transit lines. That new density and infrastructure along corridors helps to improve utilization of land within the city and suburbs. This is more sustainable for the environment and the local government coffers when something is focusing development rather than development creeping beyond their borders.
    • Maria's take also is balderdash
      Maria avers that "TIFs prevent the subsidization of sprawl" Again, as with Bruce's assertion, I'd like to see some research substantiating that. But I'd rather pose to Maria whether she's also in favor of the mass transit measure which itself can be said to subsidize development, including sprawl in outlying communities like Carmel, Fishers and such.
      • Never heard that excuse before, Bruce
        Bruce (and seconded by Maria) asserts that TIFs "keep taxes local" (i.e. in the community for public infrastructure). That's an interesting twist but it seems quite hollow and baseless (and thus suggests a self-serving stance). Aren't all property taxes 'local' and available for public infrastructure? Why would TIF be necessary to achieve that outcome? Could Bruce please point to some credible research supporting his assertion?
      • TIF Issues
        Anything with TIF as a portion of the incentives is already a boon for the unions and a burden on the taxpayer. This is the governments way of paying these thugs under the table so to speak...
      • How many times can they hit the $5 million dollar limit?
        It's worth noting that Carmel had used 20 different instruments to earn 'Poster Child Status'. Would this prevent a Redevelopment Commission from taking out 20 obligations of $4.95 million? Or 40 obligations? Umbaugh, who represents at least one other Indiana city than Carmel, would appear to benefit significantly if the outcome is to cause more, smaller obligations. Yet I can see that being the advice a financial analyst would provide. Seems like the obvious work around.
      • Remember that
        When November comes around.
      • RE:Bruce
        Ditto what Bruce said. TIFs prevent the subsidization of sprawl.
        • TIF Keeps Taxes Local
          In Carmel and other Hamilton County communities TIF is a way to keep taxes local. 75% soon to be 90% of all property taxes in the county come from incorporated cities like Noblesville, Westfield, Sheridan, Fishers, Cicero and Carmel. Instead of subidizing rural unincorporated areas that want city like services, TIF keeps taxes in the community for public infrasture.
          • What!?
            The downtown TIF doesn't count because it is such an economic development tool??? I think that is the point of each of these TIF districts. This seems like a decision which should be left to local governments. The state is over-reaching.
          • Ridiculous
            I don't know how our legislators can be so stupid. This is the worst session I can remember.

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