MT. COMFORT — Tax incentives for businesses has become a prime topic as debate grows over whether corporations moving into the area are getting too many breaks — and if so, whether the local government has the power to change it.
Homeowners met Thursday, June 17, with local officials to discuss tax increment financing, which has come under fire recently from public safety leaders and residents concerned that it is siphoning too much money away from essential services. The meeting, held at the Buck Creek Township Fire Department, continued a conversation sparked by objections to the proposed Red Rock TIF district in the Mt. Comfort area.
Two homeowners in the area, Rick Legner and Kristan Wulfkuhle, organized the meeting and invited the county’s representatives in the state legislature and other government, public safety and school leaders. Among those attending were lawmakers; the Mt. Vernon school superintendent; the chief of the area fire department; and the county sheriff. All agreed there is a problem in the county with TIF districts, but by the end of the meeting, they were no closer to solving it.
Rep. Chris Jeter, R-Fishers, represents a district that includes the Mt. Comfort area in the state legislature. Like fellow lawmakers Sen. Mike Crider and Rep. Bob Cherry, both R-Greenfield, who also attended the meeting, Jeter said areas with high levels of development shouldn’t be held to a tax cap based on lower growth across the state.
“There should be some triggers for fast-growing communities to get access to some extra dollars,” Jeter said. “We all kind of looked at each other, and I think we’re going to try and coordinate on that to see if we can do something.”
The meeting revealed confusion, even among public officials, about the purpose of TIF districts and how local governments should evaluate their placement. TIF was devised as an economic development tool to divert property tax revenue from new businesses in specific areas. In these so-called “districts,” the revenue is supposed to support improving infrastructure such as roads and utilities, making the area more attractive to site selectors.
In dispute is to what extent that diverted revenue is starving local government, which must respond to growth that the TIF districts promote. Also being questioned is whether TIFs are appropriate in Hancock County to begin with.
Wulfkuhle asked officials about the “but for” rule, which is included in most states’ TIF laws and states that TIFs should be created in areas where development would not occur “but for” the incentive offered.
“It’s supposed to be in disadvantaged, run-down locations,” she said.
Cherry said that is no longer the case in Indiana.
In the past, Hancock County officials have cited the “but for” rule, saying they cannot provide data about how much tax revenue was missed out on due to TIF districts because the developments would not have been created without them.
Jack Parker, superintendent of the Mt. Vernon schools is one of the local officials who feels that development has become a growing challenge in the western area of the county, where a large Amazon facility and several other industrial developments are located.
“Economic development is a tool to grow a community,” Parker said. “For me, growing a community should be more about balance and intentionality. I seek to hunt for that every chance I get. I do see some things that aren’t in balance.”
Parker said the Mt. Vernon school district is projected to grow by 50% in the next 10 years. Meanwhile, about 80% of new development is now occurring in a TIF district, with no tax revenue from that development flowing to local schools.
“When you have tax cap laws, the way to combat that is really to grow your businesses,” he said. “We’re growing our business, but we’re not able to take advantage of those revenues.”
According to Mt. Vernon financial adviser Greg Elkins, if all development in the area still existed but the TIF district did not, MV would capture an additional $3,244,688 of tax revenue in 2022 at its current tax rate.
Sheriff Brad Burkhart said large developments in the western part of the county have been attracting people from Indianapolis who commit vandalism and other crimes. He said the original intention of TIF districts in cities was to operate in economically troubled areas, where more development can help decrease crime by employing residents. But in rural areas, it’s had the opposite effect.
Buck Creek Township Fire Chief Dave Sutherlin said he’s also seen a major impact on the ability of his department to provide services due to recent economic growth.
The problem isn’t just TIF districts, he said. One of his biggest complaints is about the state tax cap, which prohibits counties like Hancock County from increasing their assessed property values at a pace that matches actual economic growth; the tax cap is pegged to a state average of growth that the county has, in recent years, far exceeded.
“Since November 15, our run load has gone up 41%,” Sutherlin said. “…And the maximum increase I can get in a tax levy is 4.2%.”
Cherry, the state representative for most of Hancock County, agreed that the tax cap is an issue in need of review. While the tax cap is a state legislative issue, Cherry said he did not think it would be unfeasible for the legislature to change it, potentially during its next session.
Some officials proposed more local solutions. County Commission Marc Huber requested that the sheriff’s department, fire department and school district impacted by the Mt. Comfort area TIFs submit capital plans, outlining equipment or building improvements they need. Such projects could be paid for out of TIF funds, if the county’s redevelopment commission, which oversees TIFs, agrees.
Huber also said the county needs to stop approving TIF districts and tax abatements as if it is trying to promote growth rather than to manage growth that’s already happening.
“We need to stop acting like it’s 2000,” he said.
Wulfkuhle and Legner also raised concerns about transparency in the county government, saying notice of redevelopment commission meetings should be more easily accessible to the public. Meeting notices are published in the Daily Reporter and are also generally posted on the county’s website, although Wulfkuhle said the RDC page, located under the county auditor’s section of the site, is difficult to find.