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TIF compromise: Consultant defends including business in area

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Expanding a tax-increment financing district and including a company’s recent building projects in the area to be taxed shouldn’t be stopped for the sake of a school district’s debt, an attorney representing the Greenwood mayor said.

Greenwood plans to expand its eastside tax-increment financing district, which currently surrounds Interstate 65 exits at Main Street and County Line Road, to include more of downtown and the southern side of the city. The current TIF district earns about $6 million per year.

TIF districts collect property taxes on new development in a designated area, to be spent on redevelopment projects such as street widening and other infrastructure work. Schools, the library and other property-tax funded entities do not collect property taxes on the new development as they would if the TIF district didn’t exist.

Clark-Pleasant schools Superintendent Patrick Spray has spoken five times to city boards, asking Greenwood for financial help because the schools can’t afford to buy new buses or laptops. He’s asked the city not to expand the TIF collection area, to give cash to the schools or leave two multimillion-dollar building projects out of the area where the TIF district would collect property taxes.

Two Endress+Hauser building projects would generate about $450,000 per year in tax dollars through the TIF district; but if the projects were excluded, the schools and other taxing units would collect a fraction of that amount, said attorney Sam Hodson, who represents Greenwood Mayor Mark Myers on a variety of matters.

Spray asked Monday that the city set aside one-ninth of the money it collects from the expanded TIF district for the schools.

Hodson told the council that Clark-Pleasant schools isn’t simply a little district without much money, and it has built expensive buildings. He spoke at a special meeting Monday night in front of a crowd of about 40 officials and residents.

“I’ve attended events in your administration building. It is easily the nicest school building I’ve ever been in, probably the nicest building in Johnson County,” Hodson said. “The problem with that is, the next 20 years you have to pay for it.”

The school district isn’t hard up for money, and the city needs the money more, he said. For example, the city’s controller earns about $74,000 per year, while the business administrator at Clark-Pleasant schools earns more than $100,000, he said. The Clark-Pleasant annual budget is nearly $60 million, while the city of Greenwood has a budget of $14 million, he said.

Nearly half of the school district’s 50 highest-paid employees earn salaries of more than $90,000, while none of the city’s employees do, city attorney Krista Taggart said.

Three city council members spoke out against Hodson’s criticism of the school district and the way it was presented.

“I think you have made this presentation as one-sided as possible,” council member Bruce Armstrong said.

Differences in budgets

The bickering during Hodson’s presentation was unfortunate, and the city should have come up with a solution for helping Clark-Pleasant before the issue came to the city council for a final vote, council member Brent Corey said.

“That was a big bully move. I’m sorry that that presented that way,” council member Thom Hord told Spray. “You’re fighting for your school corporation, and I applaud you for that.”

The school district has more than three times the number of employees the city has, and Hodson isn’t considering the less-expensive homes the city has allowed to be built that send students to the Clark-Pleasant schools, Armstrong said.

The numbers aren’t comparable, when considering that the property tax money that would be collected by the TIF district wouldn’t pay school employees, council president David Hopper said. School employees are paid out of the district’s general fund, not its capital projects fund, where the money from the TIF district would go.

The goal for comparing the city’s and school district’s data was to show the city and school district’s finances holistically, Hodson said.

Greenwood schools Superintendent Kent DeKoninck said he hopes never to make an insulting presentation such as Hodson’s. He attended the meeting because Greenwood schools also are impacted by the TIF district.

“Goodness, gracious. We’re trying to work together here. I’m very disheartened by that presentation,” DeKoninck said.

The city provides police, fire and street department services around the clock for much less than the school district spends, and it was important to show the difference in budget sizes, Myers said. Hodson’s presentation was done on his behalf, but the angry words didn’t represent his feelings and were not his, Myers said.

“Sometimes these meetings do get heated; but at the end of the day, we are there to represent the entire good of the city. I think the city was well represented and the best outcome was decided there,” he said.

Investing in community

The idea that TIF districts harm schools is a misconception because the notion ignores that, when TIF money is spent correctly, communities are improved and property values go up, Hodson said.

That’s ignoring the construction of inexpensive homes, including the 1,000 homes initially planned in the Homecoming at University Park subdivision, which have sent many students to the school district, Armstrong said.

“Another way to say that is more students to the school district, less appraised value,” he said. “We flooded the school district with students and didn’t give them the (property values) to make it to where they could afford to do it.”

Commercial development also hasn’t happened much outside the current TIF districts, Spray said. Where there has been growth, the city is expanding the TIF district to collect taxes on it, so the schools haven’t benefited, he said.

Clark-Pleasant would get about $1 for every $9 the city could collect on the Endress+Hauser expansion if it is included in the TIF district, and it would be a dumb decision for the city to lose the greater amount of money, Hodson said.

The TIF district is what the city needs to get the money to create a vibrant downtown, he said, so it should find other ways to help the school district without modifying plans to expand the city’s eastside TIF district.

Greenwood has invested in Endress+Hauser by committing to pay half the costs of a $22 million Interstate 65 interchange at Worthsville Road near the business, Hodson said. The city also has given the company nearly $5 million in tax breaks as incentives to expand locally, he said. Leaving the business out of the district shouldn’t even be a consideration, he said.

“It would be a very huge mistake to leave $450,000 on the table,” he said. “Do you have a problem with finding a way to help Clark-Pleasant schools, other than this very destructive way?”

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