Backgrounder: TIF Data Held Close to the Vest
“Something worth doing is worth measuring.” — Dr. John Crawford, Fort Wayne City Council
by Ken Davidson
Over the course of the past three years, obtaining information on Tax Increment Financing (TIF) districts has been made difficult and in some ways impossible.
In 2016, shortly after articles appeared in the quarterly Indiana Policy Review, the Holcomb Administration stopped publishing data related to local economic development agencies. Previously, residents could go to the web site of the Indiana Department of Local Government Finance (DLGF) and view the required annual reports. Statistics regarding revenue and expenditures were compiled there and presented statewide down to parcel-level detail.
In my home county, TIF revenue grew by 34 percent between 2015 and 2017 from just over $66 million to $89 million per year, according to data I compiled from the annual reports to the executive of 16 municipalities. Expenditures exceeded revenues in nearly every local unit.
Again, obtaining such information has become a herculean task. Now multiple public record requests have to be made as well as late nights of crunching numbers. Parcel-level detail requires yet another set of public record requests to county officials. And information regarding neutralization of base assessed valuations required yet more public record requests and more nights of complex calculation.
Nonetheless, I was able to learn that in my city, Hammond, TIF revenues skyrocketed from $6.5 million in 2013 to over $25 million in 2017. An analysis of the largest TIF in Hammond, the Downtown TIF, showed me that net assessed valuation for 461 parcels there declined from $23.6 million in 2007 to $20.6 million in 2017 despite millions of dollars in expenditures by the local redevelopment commission. TIF district lines have been redrawn to bring in even more revenue.
The Indiana Legislature passed several provisions designed to promote transparency but failed to specify penalties for refusal to comply. For example, Indiana law requires political subdivisions to upload digital copies of all contracts over $50,000. This provision is largely ignored by redevelopment commissions. Additionally, the law requires approval by a municipal legislative body if revenue exceeds certain expenses associated with a TIF by 200 percent.
However, even despite rapidly escalating revenues, there is little indication that any legislative body in my county has reviewed the income and expenditures in any significant manner. It goes without saying that conflict-of-interest disclosures are non-existent. Those who receive incentives from redevelopment commissions often operate under multiple corporate names making it difficult to trace campaign contributions.
There are myriad other provisions associated with TIF management and reporting that require data to monitor effectively. Most important, there are no penalties for blatantly disregarding the few safeguards that have been put in place.
There is no good reason that the DLGF cannot publish the redevelopment reports as they receive them, as has been done in the past. Budgets for redevelopment commissions can be clearly spelled out, including payments to contractors and real-property transactions. The Fort Wayne council this year prohibited campaign contributions from those receiving contracts. That can be made a state statute.
Yet, as other states move toward more transparency, Indiana moves to hide this important set of data from its citizens.
Ken Davidson, an adjunct scholar of the Indiana Policy Review Foundation, is a graduate of the Indiana University Robert H. McKinney School of Law and the publisher of the Northwest Indiana Gazette. He is a lifelong resident of Hammond. This is excerpted from a larger paper in the winter issue of The Indiana Policy Review.