Chesterton Tribune



Backdoor tax? Whitten rips TIF for diverting revenue and driving up property taxrates

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Porter County Council member Dan Whitten, D-at large, reacted to a new TIF report at the start of Tuesday’s Council, voicing his long-standing opposition to tax increment finance districts.

Whitten referenced the 2018 TIF Neutralization report given by the County Auditor’s Office earlier Tuesday that shows TIF areas are claiming a total of nearly $800 million in assessed valuation, which he says is “lost” by the County.

“I have called that a backdoor tax for a long time. We are losing future revenue and we are seeing tax rates either not go down or be driven up because of TIFs. That is a fact,” Whitten said. “When someone comes in and hollers about their tax rate, someone might want to redirect them to TIFs because, although our County portion of tax rate has gone down in years, people are seeing increases in their taxes and TIFs are part of that problem.”

“Absolutely,” agreed Council member Sylvia Graham, D-at large.

Porter County Auditor Vicki Urbanik said the total AV in TIF districts according to the latest neutralization report is close to $779 million. That is $37 million more than this year, she said.

The pros and cons of TIFs have been a reoccurring debate topic in local government because of the revenue that gets shifted for specific developments by redevelopment commissions, away from general tax levies.

According to the Indiana Department of Local Government Finance, a baseline property value is set in the TIF district by the redevelopment commission. Any property taxes collected at or before the baseline go to the taxing unit while any tax revenue from commercial and industrial property above the baseline, known as “incremental assessed value” is directed to the redevelopment commission.

Property tax rates that are adopted and approved for the civil taxing units are applied to the total value in the allocation area.

Council member Karen Conover, R-3rd, questioned Whitten’s points, asking how money is being lost since taxes are being collected for redevelopment.

“We haven’t lost anything. It’s the value of the land. We are getting the same thing we got before,” said Conover. She said that redevelopment commissions can grant TIF revenues to other taxing units like schools.

Whitten said the report shows that almost $800 million of AV is being captured by TIF districts and that it seems to him that redevelopment commissions don’t do what they are supposed to do with the revenues, which is to improve infrastructure in areas that need it. Whitten cited areas in South Haven as an example hat could benefit from TIF, but no TIF district has been established there.

“People are developing in areas that are not in a TIF district, so to say that Porter County is an area that needs a ridiculous amount of TIFs shocks the conscious. It’s an absolute insanity,” said Whitten.

Council member Jeff Larson, R-at large, said he agrees the topic needs to be discussed but said he would argue the impression that there is no tax revenue being generated by the properties in a TIF is a fallacy. He said he believes there are some areas where a TIF district would work “extremely well” like South Haven, and that TIFs are attractive to people who want to develop here.

Urbanik said a copy of the neutralization report has been uploaded to the Indiana Department of Local Government Finance’s Gateway system. The report was done in-house, which is a savings of $20,000 to the County, she said.


Posted 7/26/2017






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