Some Marion city council members are wanting to make changes to how the city deals with any future tax increment financing districts and tax abatements.
Council member Lynn Johnson and council member Steve Henderson are working on resolutions that would limit future TIFs the council vote on from including personal property, as well as also drafting a resolution that would put a stop to any new tax abatement the city hands out for one year.
The two have discussed their intentions with other council members at recent compliance committee meetings and could formally introduce at least one of the resolutions today during the compliance committee meeting scheduled for 5 p.m. at the second floor conference room in city hall.
The need for the changes, the council members say, is because both economic tools are diverting revenue from the city at a time where the city needs any revenue it can get.
Johnson highlighted the Café Valley TIF, which does include personal property.
In 2015, personal property at Café Valley was assessed at a little more than $10 million, equating to $300,000 in tax revenue. In 2016, that value increased to nearly $16 million and $480,000 in taxes. In the past two years, that revenue hasn’t gone into the TIF, as it was meant to, but rather to taxing units, because of a mixup in not assigning the personal property to the TIF.
That is expected to be fixed for next year and to fix this year and last year, the taxing units that got money oputiside the TIF agreement will have tax revenue withheld for the next three years.
Johnson’s worry, though, is that new personal property the bakery buys will send more tax money to TIF instead of the community through taxing units, as she believes it should be.
“If we leave it this way, they can continue to add new personal property for the next 25 years, which means we’re now buying all their shoes, clothes, computers, desks and anything they want to buy,” Johnson said.
Henderson added that the council has no way of knowing what all personal property is being added and totaled up as the county assessor is the only one who sees the full personal property list so that a valuation can be done.
“We have no way of policing it because we don’t get to see it,” he said. “It’s basically an open check to bring equipment in.”
To hopefully have answers regarding the city TIFs and to see what could be done in terms of changes, the city’s financial advisor Umbaugh & Associates will be present at today’s committee meeting.
Other council members were in support of having some TIF questions answered and worries discussed, while also admitting to their ignorance of the gritty details of past TIF deals.
“A lot of the times we were flying in the dark,” Councilman Brad Luzadder said.
Both Henderson and Johnson said the city should not include personal property in any future TIF.
Caution to putting on restrictions from future TIFs came from Marion Mayor Jess Alumbaugh, though he supported the council taking a harder look at the businesses that come into town and ask for incentives.
“What if you box yourself into that and Honda comes here?” Alumbaugh said. “It could then be something you’re following but then don’t follow. You have to be very careful because I came in thinking the same way when I was campaigning. Now I’ve been around and now I think every deal is different. I’m just saying that you can box yourself in and someone comes along with a real unique opportunity.”
The committee also faces potential pushback from other council members on its desire to temporarily stop accepting future tax abatement requests. The council, historically, has overwhelming supported approving tax abatements as a business retainment incentive, a notion Henderson says is refuted by recent studies.
Compliance committee members and other council members will continue their discussion on TIF and abatement tonight at 5 p.m. in the second floor conference room in City Hall.