Tax Increment Financing (TIF) is an area with designated boundaries (like a circle) drawn on a city map and labeled as a TIF area. The taxes in that TIF area are frozen at the time the TIF area is approved. The current property taxes continue to go into the City General Fund and to the other entities (Schools, County Government and Library).
As new development (such as Cabela's) is made on that plot of ground, those "new taxes do not go into the City General Fund" or to other entities (School City of Hammond, Lake County Government and the Hammond Public Library).
All those new taxes on the "new development go into an account for that TIF area only" for use in the TIF area for improvements such as roads and sewers.
That new money does not go into our City General Fund.
The need for extra Police and Fire Protection is increased, but new additional money does not come out of the TIF district. So the City Council has to find other ways to pay for all the extra services needed in those TIF areas including sanitation.
This may need to be done by cutting back on all departments throughout the city.
The burden of paying for the additional services is shifted to the other taxpayers!
With too many TIF areas, the whole city could suffer because services are spread too thin and there is not enough money to sustain them. The "new tax money is gone" that could have been used for Hammond General Fund Services.
In other words, new developments in a TIF district get tax breaks that can be renewed up to 30 years and the other taxpayers (homeowners, rental property and other businesses) outside the TIF have to make up the difference in lost tax revenue. IN OTHER WORDS, TIF'S ARE NOT TAXPAYER FRIENDLY! The only real winners are those in the TIF district.
Thanks to our friends at Freedom of Speech in New Albany, IN for this explanation of how a TIF works.
Friday, April 11, 2008
Friday, April 11, 2008
DLGF GROWS A SPINE
Well, here's some surprising, but good news. Commissioner Cheryl Musgrave of the Department of Local Government Finance actually said NO to a school district's over-bloated construction project. According to the Daily Journal, Johnson County's Online newspaper, Musgrave denied the Clark-Pleasant school district's $60 million dollar plan to build a new school and renovate a couple other of its school buildings, citing high tax rates in the school district.
Taxpayers launched a protest asking school officials to scale back their project to $35 million dollars. School officials reportedly refused the request, and taxpayers took their complaints to the DLGF, where they apparently found a little relief.
This is proof that the efforts of taxpayers can make a difference.
"I was very pleased with the support the DLGF gave us," commented Bonnie Shelton, a taxpayer advocate who helped lead the effort against the school's $60 million dollar building plan. "They [DLGF] analyzed the data and sided with the taxpayers."
Congratulations Bonnie! Keep up the good work. This will certainly encourage other taxpayers around the state who are facing similar battles.
From Welcome To My Tea Party
Friday, April 11, 2008
Taxpayers launched a protest asking school officials to scale back their project to $35 million dollars. School officials reportedly refused the request, and taxpayers took their complaints to the DLGF, where they apparently found a little relief.
This is proof that the efforts of taxpayers can make a difference.
"I was very pleased with the support the DLGF gave us," commented Bonnie Shelton, a taxpayer advocate who helped lead the effort against the school's $60 million dollar building plan. "They [DLGF] analyzed the data and sided with the taxpayers."
Congratulations Bonnie! Keep up the good work. This will certainly encourage other taxpayers around the state who are facing similar battles.
From Welcome To My Tea Party
Friday, April 11, 2008