Penticuff: TIF Seekers Are Getting Shameless
By David Penticuff
Our “Haves” are again turning to our “Have Nots” for monetary help through tax increment financing.
Central Indiana Ethanol (CIE) is asking my city to expand its Tax Increment Financing (TIF) district to include the former Omnisource property, which CIE purchased last year, in order to finance a project already underway at the site. CIE wants a $3.65-million TIF bond to help pay for its $25 million expansion on property that is outside of the city’s boundaries.
We think the city or the county should reject this request.
State law says that redevelopment commissions are not to provide TIF for projects that could be completed without TIF. CIE has started the project without TIF. What is there now looks quite complete from the exterior, but CIE officials say it’s only 20 to 25 percent done. Heather James, bond counsel for CIE, says, “My understanding is they would not be moving forward with the project without the expectation of the TIF.”
Well, we guess someone should tell the sheriff’s department and schools to cancel some of the plans their organizations have made because executives at CIE, a private and apparently prosperous corporation, have decided it needs the tax dollars more. If CIE wouldn’t do the project without TIF then it should have waited for TIF approval before construction. It is presumptuous to the extreme to start building and then seek financing for the construction work.
But here is the thing: CIE might well be right. Elected officials, on the city’s side anyway, cave to economic development requests pretty much anytime. Why not start construction? Who is going to have the guts to say no?
Again, under Indiana statute, for almost every TIF you have to certify that the project would not happen but for the use of TIF. That is so the public doesn’t pay for projects that can be done with private resources.
We think CIE is a well-run company. We don’t think it makes sense that a well-run company would stop a $25 million project, already started, for lack of a $3.6-million TIF bond.
One more thing: The property where the project is being built is not in our city. Initially, CIE asked for the city to annex the land in order to expand the TIF but suspended their request.
CIE now is going to ask our county commissioners to “reassign jurisdiction” from the county to the city’s redevelopment commission in order to clear the way for the TIF. It’s a quicker process that gives the city the power to incorporate the property into an economic development area – without actually annexing the property into the city. CIE calls it “an easier, more elegant solution.”
We hope commissioners will stop this madness and protect its jurisdiction, along with its tax base, by not going along with this company’s plans for our money.
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 was published Feb. 27.