Tax Increment Finance -TIF
Taxtopics Brief Dated June 6, 2014
We have all heard the misconceptions that TIF monies just go into developers pockets, but that is not correct. TIF monies are spent to assist a economic development area or a blight area with infrastructure improvements. Infrastructure improvements are sidewalks, street widening, sewage to name a few. Economic development means more jobs, with more jobs, people will buy or build homes, thus some of the revenue generated into TIF accounts is made up from property tax payments. It is a circle. As of Senate Bill 118, there is a time limit on the legacy TIF districts, which Terre Haute Downtown is a legacy TIF.
So, why all the fuss. The Redevelopment Commission had control of the checkbook for all the TIF’s until the Mayor went ahead and wanted these accounts to be signed over to city controller, Leslie Ellis as she will be Treasurer of the TIF accounts. The accounts were signed over on April 25, 2014 and on April 28, 2014 there were three drawls on three different accounts totaling 3.4 million dollars. It was stated that the money was pooled with other city funds for a “better interest rate”. In the article dated May 21 and 28 reads
When asked in the meeting why the money was transferred from the Redevelopment Commission accounts, Ellis said it was to take advantage of better interest rates available in other accounts. When asked later to specify the rates involved, she said she would have to supply that information later. She also said the main reason to move the money was not to take advantage of better interest rates. The main reason was to begin moving Redevelopment Department financing to the City of Terre Haute.—Tribune Star ( May 21,2014)
“That, Bennett said, gives Ellis the authority to “pool” Redevelopment cash with other city funds to meet expenses. As long as Redevelopment funds are properly settled at the end of the year and no charges are made against them that are not allowed, they can be managed like any other city funds, he said.” -Tribune Star (May 28, 2014)
The cash Statement of the City of Terre as of May 15, 2014 shows the General Fund at $(7,438,987.03).
These draws co-inside with city payroll and as we have been reading and I have been hearing, there is an issue with payroll. Lack of funds, computer glitches, mix-ups, banks error.
Links to Tribune Star Articles:
6/3/2014 Council Meeting on TIF Delayed
5/28/2014 Mayor Refuses to Return TIF Money
5/27/2014 TIF Money Not Yet Returned
Redevelopment Commission—City took TIF Money
Clock Ticking Down on Downtown TIF District
TIF Understanding Presentation