Redevelopment commissions throughout the state control millions in tax dollars, and state lawmakers want more people to have a say in how that money is being spent.
Members of redevelopment commissions are appointed, not elected, and oversee the spending of tax dollars without needing approval from mayors, county commissioners, or county, city or town councils. Once again, state lawmakers are trying to tweak state law so elected officials, and the voters who put them in office, have more of a say in how that tax money is being spent.
The proposal by Sen. Pete Miller, R-Avon, would require redevelopment commissions to submit quarterly reports to the city council, give information to the council before buying, selling or transferring property, get council approval before borrowing money and reinforce requirements to follow open meeting rules and answer public records requests. The proposed changes aren’t new. Sen. Luke Kenley, R-Noblesville, has made similar proposals in recent years that weren’t approved.
The changes are needed to help protect local governments, Miller said. Tax-increment financing, or TIF, districts funnel some tax dollars away from cities, towns, schools and libraries and those units all have to share a limited amount of tax revenue. The changes would help monitor whether redevelopment commissions are spending money responsibly, Miller said.
Miller thinks past proposals were not approved because legislators either hadn’t studied the issue enough or had other projects that were higher priorities, and he has been talking with state lawmakers to build support this year.
Both Greenwood and Franklin mayors have been watching for changes to redevelopment commissions that would limit how TIF money can be used, but aren’t concerned about the proposed changes. Both cities already have two city council members who serve on their redevelopment commissions, which helps keep other elected officials informed of ongoing projects. The new checks and balances could slow a project if it requires an added approval, but the board would likely already be communicating with other city officials about a project of that size anyway, Franklin Mayor Joe McGuinness said.
“I don’t have any issue with it. We try to follow (those rules) anyway,” Greenwood Mayor Mark Myers said.
The proposal requires redevelopment commissions to give updates of how they’re spending money in TIF districts, which set aside some property taxes paid by businesses for economic development. Since board members aren’t elected, if voters don’t like how the money is being spent, they can’t hold those people accountable, Miller said. The new rules would require the boards to report to city councils whenever they plan to buy, sell or transfer properties, send in quarterly reports and provide an annual budget to the council for review, which are not required now.
Those checks should be in place because of the amount of tax money some redevelopment commissions control, Miller said. For example, Greenwood had about $14.5 million in TIF funds at the end of last year, while Franklin has about $5.7 million.
“At some point in the process you have to have an elected official involved that’s accountable to the people. We’ve got a system where we need to have some accountability and an opportunity for the public to weigh in,” Miller said.
Elected city council members also should have more say because the money raised in TIF districts doesn’t go to other taxing units, such as schools or libraries, Miller said.
In Greenwood and Franklin, city council members serve on their five-member redevelopment commissions.
Any large projects the redevelopment commission in Franklin has paid for in recent years, such as reconstructing North Main Street, involved the mayor, city council and board of works, McGuinness said.
“That puts some elected oversight into what those funds are being used on. Those big expenditures are always brought in front of the council, even though there are not any approvals that are required to come before the council,” he said.
Miller’s proposal also would require the council to approve new debt, such as if a redevelopment commission wanted to borrow more than $5 million or over more than three years. Greenwood has TIF loans for the Worthsville Road interchange and city pool projects. Franklin board members have looked into how much the redevelopment commission could borrow, such as if a large factory wanted to come to Franklin but wanted the city to make land improvements first.
If the legislation is approved, Franklin might only be stalled a few weeks to get the additional OK from the city council, McGuinness said.
“If Acme Corporation was a large enough type investment that would require it, it could slow that process down,” he said. “It could potentially handcuff us, but those projects don’t happen overnight.”