The Burns Harbor Redevelopment Commission played the What If game Monday
What if the town designated an additional economic development zone,
commonly known as a tax-increment financing or TIF district?
What would happen to the TIF property-tax revenue captured from new
improvements/development that would occur there when all current TIF money
is pledged to retire bonds that financed installation of the town’s
sanitary-sewer collection system?
If the ArcelorMittal steel plant is put in a TIF zone, how would that affect
Duneland Schools, Porter County, Westchester Public Library and other
jurisdictions who share the steelmaker’s property taxes?
Could money raised in a new TIF zone be used by the town to make
improvements in the existing TIF area? Elsewhere in town?
To get definitive answers to these and other questions, the RDC voted to
retain TIF consultant Stu Summers of Town and City, Inc. with a report due
next month. The cost, including work by RDC attorney Chuck Parkinson and
Hesham Khalil of the town’s engineering firm, was set not to exceed $1,500.
Summers agreed to prepare a framework for a TIF expansion strategy. One
hundred eighty vacant acres Mittal owns between Interstate 94 and U.S. 12
west of Indiana 149 already is in a TIF district.
At the request of Duneland School Board member John Marshall, who is a
non-voting member of the Burns Harbor RDC, Summers will include the
potential impact to Duneland if the Mittal steel-making facility is made a
Summers said since the State of Indiana has taken over financing school
general funds, the impact of a new TIF to Duneland might be minimal.
Marshall said any impact, when there’s talk of eliminating school positions
and cutting back programs, won’t be popular.
If Burns Harbor designates Mittal as a TIF district, that won’t make
property taxes for other government units go up, Summers explained, although
it could prevent their taxes from going down in the future.
Summers said under the current state law it’s almost easier to create a new
TIF district, even adjacent to an existing one, than to expand a district
already in place; the latter would require approval from a state agency. A
key determination will be whether revenue from any new TIF also has to be
used to repay the town sewer bonds that are retired in 2016. RDC member
Cliff Fleming said the town potentially may want to revisit the loan
RDC member Mike Perrine said if it’s allowed the town could use the
additional TIF revenue to pay off the bonds faster. Surplus funds the town
previously used to help make the annual bond payment are gone and the
approximately $315,000 a year in TIF income isn’t enough to cover the
$760,000 bond bill; beginning this year the balance is coming out of general
Fleming said he wanted to explore expanding/adding a TIF district to see if
cash could be freed up to help partner with developers to realize the goals
of the town’s new comprehensive plan and desired downtown district that
would move the town from rural to urban.
He added it would defeat the purpose of putting Mittal in a TIF if the new
tax money it raises has to go for public improvements at the steel mill
unless that money also could be used elsewhere in town. Summers will
research the matter. Raising additional cash to help retire the sewer bonds
would be a plus for taxpayers, said Fleming.
Perrine reminded that just because the town can capture more in new TIF
taxes and any improvements will increase the town’s assessed valuation, “We
could have another Mittal Steel drop in our parking lot and it would not
increase our budget. It just lowers your tax rates unless you can get excess
During the hour-long discussion Perrine also questioned using TIF money to
finance economic development if it meant having to saddle Burns Harbor
taxpayers with hydrant, garbage and streetlight fees, none of which are
charged now, to make ends meet. Perrine said he’s not against amending the
TIF zone but the town needs to be sure there is a real benefit.
Marshall said if the purpose of an RDC is to enhance the quality of life in
a community, it doesn’t make sense to increase the residents’ tax burden to
do it. RDC member Louis Bain was absent.