Penticuff: A Tax Break for City Government?

March 27, 2019

by David Penticuff

It is frustrating to see elected officials line up in unity to hand over more than $3 million in tax money to assist a company that in my city, by all appearances, does not truly need the money. But it’s not really about Central Indiana Ethanol (CIE).

When asked why we are doing this, the elected officials involved just say the company’s past TIF was “one of the good ones” out of our past giant dumpster fire of economic development TIFs that we won’t have paid off until closer to mid-century. And of course, they say, CIE is a great corporate citizen.

So apparently we owe them $3 million for hosting their enterprise. Well, almost. Their expansion is taking place outside the city, but attorneys can fix all that, they say. The real reason, we think, is that the establishment here wants to finance city government, not CIE expansion, through this TIF. We think this is sailing through on the promise of a legal but ethically challenged planned $1-million annual kickback to our city through its redevelopment commission.

The clever folks at Umbaugh & Associates told our county commissioners that the TIF is crafted to create $1.5 million in TIF revenue a year, but just $500,000 of that per year will be needed to make the payments on the CIE TIF bonds. The rest, two thirds of the money, flows back to the city redevelopment commission to be used however the city wants.

And we mean however it wants, as other cities and towns have used their TIF slush funds to pay salaries and other items that have nothing to do with economic development. So, it’s not really not a TIF for CIE. It’s a TIF to bail out the city when tax revenues decline or it’s a cushion to pay for whatever pet project the mayor or the next mayor might develop.

Since four of nine of our city council members are running for office and just might be lusting after a chance to use the kickback dough by way of the redevelopment commission, we didn’t expect a lot of close questioning at a recent meeting. A majority of the members of the redevelopment commission are appointed by the mayor.

So our city administration and every elected soul who likes to spend your money is passing this TIF for a future slush fund, at the expense of schools, law enforcement and the services we need.

David Penticuff, an adjunct scholar of the Indiana Policy Review Foundation, is editor of the Marion Chronicle-Tribune, in which a version of this essay appeared.

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