EDITORIAL: Let citizens opine on TIF spending

May 2, 2015

The city of Indianapolis needs to craft a thoughtful strategy for how to spend millions of dollars in anticipated surplus downtown TIF funds over the next three years, and that strategy should include input from stakeholders outside the mayor’s circle.

As IBJ reporter Kathleen McLaughlin reported in last week’s issue, the city has spent $161 million since 2010 from the downtown TIF on one-time projects—from shoring up the Capital Improvement Board budget to paving IUPUI roads—all at the sole discretion of the mayor and the mostly mayoral-appointed Metropolitan Development Commission.

According to projections of City Controller Matthew Kimmick, Indianapolis’ next mayor will have almost $60 million more by 2018 to disperse as he wishes: fund more one-time projects, save on interest by paying down TIF bond debt early, or release TIF assessed value to the county as a whole, generating revenue for other taxing districts.

Arguments can be made for or against any of these choices; the wisest path might, indeed, be a combination thereof. But under the current TIF structure, no provision exists for debate. Unlike spending from the city’s general budget, which requires City-County Council approval, the mayor can decide on his own how to spend any TIF funds left over after debt payments for bond obligations are met.

The public, through its city-county councilors, can’t weigh in on whether the priority should be to boost funding for city services or to finance economic development projects or to reduce the interest on debt obligations. As Democratic Councilor Zach Adamson said, the TIF surplus has become, in essence, a “slush fund” for whoever’s in the mayor’s chair.

Only a few short years ago, debate over how to spend extra downtown TIF money was a non-issue; there was none. Started in 1982 to kick-start downtown revitalization, the downtown TIF district was expanded through the years until it is now the city’s largest—with extensions that reach north almost to 25th Street and south to Eli Lilly and Co. property that backs up to the Interstate 70/65 south split.

Former Mayor Bart Peterson’s administration struggled to meet debt obligations, but expanding the district and instituting a tax levy for an Indianapolis Public Schools capital campaign turned the tide. The surplus began building shortly after Peterson’s successor, Greg Ballard, took office in 2008, and the Mayor’s Office has essentially had free rein with it ever since.

An election year is the perfect time to correct this problem. Voters should press mayoral candidates to reveal in their platforms how they intend to bring the City-County Council into the decision-making process for future TIF surplus spending.•


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