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Editorial: City’s compromise on TIF would be sensible move

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Greenwood is proposing to significantly increase the size of its tax-increment financing district on the city’s east side. The district would stretch from County Line Road to the city’s southern edge and extend as far west as portions of the Old Town area.

Tax-increment financing districts capture property taxes on new development and on increased assessments in designated areas and channel those funds into economic development projects. None of that tax money is shared with libraries, schools, the county or other taxing bodies.

Currently, the Greenwood Redevelopment Commission oversees the spending of more than $7 million collected in the TIF districts each year. Expanding the district would add millions of dollars in valuation.

The Greenwood City Council voted 4-4 Tuesday on whether to expand the city’s eastside TIF district. Since the members couldn’t reach a decision, the council will meet to vote again.

That means there’s still time to seriously reconsider this plan. The city would be siphoning off property tax revenue for its own use at the expense of other public entities, most particularly schools.

Clark-Pleasant Superintendent Patrick Spray has asked the city multiple times for assistance because of shortfalls in property tax revenue due to property tax caps. The school district is the fastest-growing in Johnson County and has more than $116 million in debt because of several building projects, including new middle and intermediate schools, to accommodate the added students.

Those requests have yielded limited results. In fact, at this week’s meeting, city council member Thom Hord said, “I’m for helping schools. I think you have way overspent. Now you’re looking for help getting out of that.”

This comment is shortsighted. The decision to build and remodel schools was necessitated by skyrocketing enrollments. Then property tax caps were instituted, which changed the rules but made no accommodation for decisions made under the former system. Franklin is encountering the same problems.

Spray acknowledged this when he responded, “If I were building buildings today as opposed to pre-tax caps, they would look a lot different.”

In addition, Greenwood bears part of the responsibility for the growth in the Clark-Pleasant district. Through zoning changes, it has encouraged developers to build subdivisions. Those new families sent their children to local schools.

But even occasional support for schools from the TIF districts, especially an expanded one, doesn’t erase the fact that the Clark-Pleasant and Greenwood school districts still would be denied their share of revenue from growth in the area.

TIF districts were created to enhance economic development. We agree improving local infrastructure, including downtown streets and sidewalks, would enhance the community and spur development.

But at the same time, one of the key factors in economic growth is education. It takes high-quality local schools to produce the skilled employees needed in today’s workplace. In addition, good schools are among the things companies look for when relocating or expanding.

Spray has proposed excluding measuring device manufacturer Endress+Hauser’s most recent building projects from the expanded TIF district. This idea drew support from two members of the city council.

We think it would be a good first step.

School districts already have made sacrifices. The city, which already receives a substantial amount of TIF money, would be asked to make a sacrifice as well.

Strong schools are a key to economic development. Denying them support is wrongheaded and potentially damaging in the long term.

Greenwood needs to be a good civic resident and work with its neighbors.

First, compromise on the TIF district. Then have a serious discussion about the impact of TIF districts on schools.

The city needs to be part of working toward the greater good of the community.

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