An unexpectedly controversial bill that would give school districts voting power on redevelopment commissions has returned to the Indiana Statehouse this year.
This year’s bill, filed by Republican Rep. Tony Cook, would require every town, city or county redevelopment commission to have a member that also serves on the local school board or an individual recommended by the school board.
Redevelopment commissions, which are five- or seven-member boards that oversee economic development projects within tax increment financing districts, are already required to include someone from a school corporation, but those members are non-voting. The other members of redevelopment commissions are appointed by county commissioners or mayors and council members.
Similar measures that would have given the school representatives voting rights have failed in the previous sessions, as municipal officials argue it’s an unnecessary move and could give a school board member unchecked power because those individuals are not elected to make economic development decisions.
But education advocates argue that TIF districts take away funding from schools, so the schools should have a vote on TIF-related decisions.
Cities and counties can establish TIFs as a way to capture taxes from incremental assessed value in areas identified for redevelopment. Property taxes from new development in a district go in a fund that the redevelopment commission oversees and invests back into the district.
A Ball State University study from 2016 suggested that TIF districts throughout the state are diverting as much as $320 million annually from other taxing units, with the biggest impact on school corporations.
During a hearing on House Bill 1166 before the House Government and Regulatory Reform Committee on Wednesday afternoon, Cook said the partnership between redevelopment commissions and schools makes sense—communities need good schools to attract more residents, and schools need successful communities to attract more students.
He said he’s confused as to why schools can’t have a vote on redevelopment projects and TIF spending.
“I’m just astounded we can’t seem to get there,” Cook said.
AIM, formerly the Indiana Association of Cities and Towns, is opposed to the bill.
Lindsey Moss, legislative counsel for AIM, said school board members are elected to make decisions that would effect the school corporation, not the entire municipality, but she agreed schools should be consulted on projects, as they are now.
“We all need each other in order to move our communities forward,” Moss said.
A handful of education officials testified in support of the bill at the meeting, including members of the Indiana School Board Association and the Indiana Small and Rural Schools Association, and a board member for Zionsville Community Schools.
Chris Lagoni, executive director of Indiana Small and Rural Schools Association, tried to alleviate fears that allowing the school representative to vote would significantly change things.
“It’s not going to control it,” Lagoni said. “It’s not going to stop anything. It’s just one vote.”
Rep. Kevin Mahan, R-Hartford City, said he’s repeatedly heard from the school corporations in his district that TIF districts have taken away money from them, despite city officials arguing otherwise.
“They will never agree on this issue,” said Mahan, who is co-authoring the bill.
Rep. Randy Lyness, R-West Harrison, said he’s heard from people on both sides of the issue in his district, so he’s unsure how he will vote on it.
“I really don’t see it being a big deal,” Lyness said. “You’re talking about one vote on a board that has five or seven votes.”
The bill remains in the committee and is expected to be amended and voted on next week.