The Clinton County Board of Commissioners approved the third of four steps in establishing a new tax increment financing, TIF, area in an already established TIF area to align with the funding of bond payments.
The TIF area is expected to be created in the area west of State Road 28 near Interstate 65 where new sewer and water pipes have been implemented by the county. The TIF area is expected to help fund the bonds created to fund the pipes, and it will be placed inside the existing “I-65 TIF Allocation Area” and will be renamed the “State Road 28 Corridor Infrastructure TIF Area.”
Alan Dunn, Redevelopment Commission and Council President, approached the commissioners on Oct. 17 to share insights on the proposed TIF area. The first step for approval required the Redevelopment Commission to propose the creation of a second allocation area within the existing TIF district, which led the Area Plan Commission to ensure the new TIF area aligns with planning and zoning guidelines, which was approved on Oct. 17.
“Obviously we already had a TIF there, so it does,” Jordan Brewer, Commissioner President, said. “The third step is that it comes to the commissioners, and then it will go back to the RDC where it will have a public meeting and public comment section for I believe a declaratory resolution.”
Dunn stated that the TIF area is intended to reset the 25-year timer on TIF areas since the existing TIF was created in 2014, which results in the area only being available to collect funds for 16 more years. With the implementation of a new TIF area, the 25-year clock resets for the allocated area, which the county intends to further align with the 35-year bond payment plan for the pipes.
“Ultimately, what it is doing to just keep it at a baseline, simplistic level, is the TIF has a 25-year lifespan, and it started in 2014,” Brewer said. “From 2014 until 2020 to 2021, there wasn’t any development in the I-65 corridor, so it wasn’t capitalizing on any infrastructure. Infrastructure got put in place, and now we’re at the position where we can create the second allocation area and extend that life 25 years.”
Dunn and Brewer stressed that the TIF allocation area does not affect taxpayers in the area as the TIF is being placed inside of an already allocated area. Brewer further stated that the TIF was reevaluated to remove residential properties that were causing the TIF funds to decrease for the county.
“One important piece that people need to understand is that it doesn’t change your tax revenue,” Brewer said. “The TIF capitalizes on increased value from the base level, so when a development comes, that’s when the TIF will capitalize on revenue, and it will help pay for the infrastructure. Essentially, that allocation area, on a basic level, is paying for the infrastructure rather than everybody else paying for the infrastructure in that area.”
Dunn echoed Brewer’s statements, commenting that taxes and rates will not increase or decrease as a result of the new TIF area.
“It changes nobody’s tax bill,” Dunn said. “It changes no rates. It changes nothing other than allowing us to extend that window for the tax increment finance area sunsets by that additional nine years.”
Dunn explained that TIF areas act as a means for counties to utilize tax revenue that is serviced by new infrastructure and is available to be collected by the county to help fund the new infrastructure rather than requiring residents to fund the developments.
“It’s kind of a user tax,” Dunn said. “The people that benefited from new infrastructure, their taxes pay for that infrastructure.”
The commissioners approved the resolution for the TIF area with a vote of 2-0, and the Redevelopment Commission will meet on Nov. 10 for a public hearing as the last step of the implementation process. If the TIF is approved at the meeting, the new area will be allocated for the 25-year period to help fund the 35-year bond schedule.