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Other districts allows funds to flow back to schools, meet needs

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Greenwood isn’t the only Indiana community that’s been asked for help buying school buses.

The concept of turning tax-increment financing, or TIF, district money over to schools, libraries and fire districts isn’t an original idea, either.

Clark-Pleasant Schools Superintendent Patrick Spray has made requests to two city boards, laying out the district’s dilemma: It has a student population that has grown rapidly and big loans to repay for the buildings that now serve those children.

He also has asked for TIF funds to help pay for what the school district can’t afford — new school buses, which the district is replacing one at a time maximum, rather than six annually as it had in the past.

Other cities and towns in Indiana have helped their local schools with money collected in their TIF districts, including funding for operations and capital projects. Brownsburg, for example, has been sharing the money collected in its TIF funds for years.

Similar ideas could be considered in Greenwood. The city redevelopment commission will consider helping Clark-Pleasant schools but won’t make any quick decisions, commission president Mike Tapp said. The members also will look at the precedents set by other communities, he said.

“I think we have to. I think if we don’t consider what other cities have done, I don’t think we’ve done our job,” he said.

“They might not be viable options, but I think it’s being more fiscally responsible than shutting the door on the whole thing.”

Cities and towns can collect property tax money from new development in TIF districts, diverting those funds from other property tax-funded

governments, such as the county, schools and libraries. The funds are collected to be spent on economic development efforts to attract businesses, such as infrastructure projects to improve roads and land that can be developed.

The libraries, county and other property tax-funded governments sacrifice tax income to the TIF district for the sake of economic growth, Brownsburg town manager Grant Kleinhenz said.

Schools collect about 60 percent of any property tax bill, so they lose the most potential income when a TIF district is in place, he said.

“I think we try to be cognizant of how our actions and the TIF affect other taxing bodies,” he said.

This year, the town won’t set aside the taxes paid on $14.5 million, or about 15 percent, of the property values in one of its TIF districts, he said.

The schools and other governments will collect the property taxes instead.

Each year, the town considers the amount of taxes it collects in the TIF, how much money would go to a taxing body if the TIF district didn’t exist and how much that impacts the school or other government’s budget, Kleinhenz said.

The town redevelopment commission decides how much property value to return, meaning the property taxes will go to other governments, instead of being set aside in TIF districts. The town board begins discussing the percentage or dollar value in March so residents can weigh in before the state’s July 1 deadline to decide. Brownsburg school leaders have come to talk about funding shortages to buy school buses and other needs, he said.

As another way to help other local governments with funding, one of the town’s TIF districts collects half of the property taxes each year on new development, and other governments collect the other half.

Greenwood officials haven’t been sure what the law allows when it comes to giving TIF dollars to schools or allowing the schools and other taxing entities to collect taxes on a percentage of the property values captured by the TIF district. Greenwood is currently funding projects, such as a new aquatic center and the widening of Worthsville Road near a future Interstate 65 exit, with TIF funds.

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