County wary of new economic development law

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Randy Sorrell

HANCOCK COUNTY — A new law will let the state of Indiana create special districts that capture taxes for incentivizing development. Concerned about losing control to the state, Hancock County government is considering ways to preempt the practice, including creating more special tax districts of its own.

The law, which goes into effect on July 1, lets the Indiana Economic Development Corporation establish innovation development districts.

In such a district, property taxes from new development would go into a fund to be used in the district, like the tax increment financing districts that counties, cities and towns use to collect funds for infrastructure in areas targeted for commercial and industrial development.

At least 12% of the property taxes collected by an innovation development district would have to go to the taxing units with territory in the district.

An innovation development district fund would also get state income tax and sales tax revenue from activity in the district.

If the expected total costs and benefits of proposed investment in an innovation development district are less than $2 billion, the state and local leadership of the area the district is proposed would have to enter into an agreement over governing the district. If it’s over $2 billion, however, the state can act on its own.

Randy Sorrell, executive director of the Hancock Economic Development Council, noted the law comes on the heels of deals like Intel’s “mega-site” coming to Columbus, Ohio.

“Indiana wants to be more competitive with these kinds of projects,” Sorrell said. “…Whether or not it ever lands in our lap, I don’t know. I certainly understand elected (county) officials’ concerns about it. It gives the state a very powerful position.”

The state would not be able to create an innovation development district in an area in which a local tax increment financing district is already established. That’s prompting Hancock County leaders to think about creating tax increment financing districts in areas in which innovation development districts are conceivable.

John Jessup, president of the Hancock County Board of Commissioners, said those areas include northwest of Mohawk, on Ind. 9 north and south of Greenfield, and east of Greenfield on U.S. 40.

“Really we’re just trying to scramble and learn about the law and the potential downsides to it for the county and do the best we can to protect the county’s interests,” Jessup said.

John Jessup

The county board of commissioners is scheduled to meet in executive session on April 19 to discuss possible legal challenges to the law.

“It seems like a really bad piece of legislation for the people of Hancock County, and we’re exploring whether or not there’s any challenge that needs to be made to it because it seems like on the surface that it would really limit our ability for home rule,” Jessup said.