House bill jeopardizes Jeffersonville's Promise and similar measures in state

Behind House Bill 1596 are a trio of area representatives, Ed Clere, R-New Albany, Karen Engleman, R-Corydon, and Jeffersonville Democrat Rita Fleming, who now is having second thoughts. Rep. Jeffrey Thompson, a Republican who represents Hendricks and Boone counties, also co-authored the legislation.

Language already exists surrounding how redevelopment districts can utilize TIF funds. However, Clere believes the language needs to be tightened to prevent Jeffersonville's Promise and similar programs. 

The City of Jeffersonville, through its redevelopment commission, has pledged to commit a total of $750,000 of Tax Increment Funds (TIF) over the next five years to fund Jeffersonville’s Promise, Mayor Mike Moore said in November, when he announced the initiative.

Moore said then that the city has been collecting TIF dollars for approximately 18 years from new businesses in designated commercial areas of the city, such as parts of 10th Street and Veterans Parkway. Gottbrath Parkway will also have businesses contributing to the city's TIF.

Clere said Friday he believes the program lacks structure and accountability, and he thinks it discriminates against some children in the city who attend other high schools outside Jeffersonville while benefitting children from other communities who put their children at JHS.

H.B. 1596 stipulates that allocated property tax proceeds can be spent for projects outside a redevelopment district only if the redevelopment commission determines expenditures: (1) will directly benefit the redevelopment district; and (2) will result in the creation of jobs in the private sector.

Additional language puts structure around the use of TIF dollars, with the focus on ensuring any educational program funded by redevelopment commissions are:

• open to all qualified individuals regardless of educational background;

• is designed to fulfill the workforce needs of an employer or a prospective employer whose wages for jobs included in the program equal or exceed the county average wage; and

• is structured as a forgivable loan program that requires participants to work for employers located in the unit for a period of time as a condition of loan forgiveness.

It also states that “A commission may establish a requirement that a participant in a program must reside in the unit.”

H.B. 1596 will be the subject of a committee hearing at Indianapolis on Wednesday, when Moore and other stakeholders are expected to speak.

“It concerns me that anybody in state Legislature would try to stop that,” Moore said.

JEFFERSONVILLE’S PROMISE

Scholarships through Jeffersonville's Promise were intended to be available to JHS graduates only from the Class of 2019 and those classes thereafter.

There are some requirements that must be met for a student to qualify:

• JHS students must have a minimum of a 2.0 high school GPA and maintain a 2.5 GPA while enrolled at Ivy Tech.

• Students must be enrolled at Ivy Tech during the summer, fall or spring term after their commencement from high school starting in Fall 2019.

• Enrollment in credit-bearing and workforce-focused courses toward attainment of a certificate, certification or degree at Ivy Tech is required.

Administered by Ivy Tech, the program is intended to be a last-dollar scholarship, which means students must first accept all federal aid, local aid and other scholarships. Completion of the Free Application for Federal Student Aid (FAFSA) is required.

Moore said Jeffersonville’s Promise has been the most popular initiative the city has introduced in his two terms as mayor.

“It’s the best thing that has ever happened in the history of Jeffersonville,” he said. But the mayor believes H.B. 1596 "puts Jeffersonville’s Promise in serious jeopardy.”

After hearing from members of the community about their support of Jeffersonville’s Promise, Fleming said she has chosen to remove herself as the author of the bill; however, she said she still wants to keep an eye on how TIF funds are used.

Clere said he will take over as the bill’s author. Engleman did not return multiple messages seeking comment.

“This is an attempt to put in place reasonable, common-sense requirements before taxpayer dollars are used this way,” Clere said, adding that the second section is directly aimed at dismantling Jeffersonville’s Promise.

OPPOSITE VIEWPOINTS

Clere said his goal with the legislation is to stop Jeffersonville’s Promise in its tracks, as well as any others who want to model it.

The plan, as it is now, does not benefit all high school students who reside in Jeffersonville, Clere said, as some residents choose to send their children to other school districts and private schools.

On the flip-side, Clere said, the program does benefit students who attend JHS from other communities by providing them with a college education using Jeffersonville’s dollars.

Moore said the program was put together that way on purpose to benefit Jeffersonville’s only high school. The more students who attend JHS, the more money the school gets from the state.

And, Moore said, it not only benefits families who couldn’t otherwise afford to put their students through college, but it benefits existing and future employers by creating a boon of college-educated, workforce-ready employees. 

Clere is also concerned that there is no “workforce alignment” in the program. It’s open-ended, he said.

“Why wouldn’t you want to focus on a targeted workforce need,” he said. “This shotgun approach blasts out a lot of money with no particular target.”

When the program was announced, Ivy Tech Chancellor Dr. Travis Haire said JHS students who receive the scholarship can use it for any pathway best suited for their goals: a short-term credential, an associate’s degree or a transfer pathway that affords the chance to complete the first two years of college tuition free before transferring to a four-year institution.

Clere also takes issue with Ivy Tech being the sole higher-learning beneficiary of Jeffersonville’s Promise.

“It not just discriminating based on where the student goes to high school. Since it’s limited to Ivy Tech, it provides no benefit for students who wish to attend another college or university,” Clere said. “So a Jeff grad who wishes to pursue a two-year nursing degree at Ivy Tech gets his or her way paid, while a Jeff grad who wishes to pursue a four-year nursing degree at IUS gets nothing.”

Moore said he has been contacted by communities and businesses – including Fortune 500 companies – who are impressed with the city’s innovative partnership with Ivy Tech and what the invest will provide to the community.

Clere said he would be in favor of using TIF dollars for targeted use to attract big business.

“If a Fortune 500 company has a specific unmet workforce need – and creating a partnership betters our local community – and TIF money helps land that company, then I’d be all for it,” he said. “I find it hard to believe that a Fortune 500 company would be coming to Southern Indiana because of a program that allows students to pursue education or training that may have nothing to do with the workforce needs of the company in question.”

Finally, Clere feels the program is too “open-ended” and there is no “accountability” built into the program for those who use the scholarship yet don’t complete their degree.

He said he believes Jeffersonville is “hoarding property tax revenue, and they’re not sharing it with schools.”

He attributes that to research conducted in 2017 when he asked for 2018, 2019 and 2020 projections.

“According to the nonpartisan Legislative Services Agency, Greater Clark [Community] Schools were projected to lose about $3 million this year as a result of tax caps,” Clere said, adding that “about 75 percent of the loss is attributable to TIF.

“Spending another $150,000 a year on a highly questionable program that will benefit a limited number of students doesn’t make up for the lost revenue that could be paying teacher salaries and supporting other classroom needs,” he said. “Overuse and abuse of TIF is strangling schools and other units of local government.”

Clere called Jeffersonville’s Promise a “shell game” that’s using TIF money to “help send some students to Ivy Tech but they’re taking millions of dollars from the Greater Clark schools.”

Moore said he will fight any legislation that threatens to take away Jeffersonville’s Promise.

“I will do whatever I can to defend Jeffersonville’s Promise,” he said. “That’s my responsibility as the mayor of Jeffersonville. This is not right.”