Variations can happen within any tax increment financing (TIF) district.
But a $1.5 million difference in base value within two weeks? State and county officials agree that is unusual.
Every year, Indiana counties and cities are required to prepare a spreadsheet for each TIF district in their jurisdiction. Stable or “base” revenue earmarked for schools and other taxing units are separated from new funds generated by increases in taxable assessed values where development is taking place.
It is a process called TIF neutralization, which Bartholomew County Commissioner Tony London says is done “to make sure the right money is going into the right bucket.”
But a red flag known as a “trigger change” was raised by the Indiana Department of Local Government Finance (DLGF) regarding a county TIF district. In addressing the county commissioners, Jack Montgomery of Development Economic Finance Consulting LLC described the district only as “in the Edinburgh area”.
While the name was never specifically mentioned, Meadow Lawn Farm, located in German Township, remains the only TIF district operated by Bartholomew County government near Edinburgh. Originally established as 231 acres, the district was expanded by nearly 3,000 acres in late 2019.
The DLGF was concerned because of changes in certified net assessed values that occurred between the spreadsheet created on July 18 and the submission of certified net assessed values to the state, Montgomery said.
“Nothing nefarious,” London said. “Just some new information came to light.”
Montgomery agreed, adding the $1.5 million difference may have been the result of adjustments, the correction of errors, or appeals applied to the July 18 spreadsheet that differed from the Aug. 1st submission of certified net assessed values to the state.
After DLGF discovered the discrepancy and reported it to local officials, a new spreadsheet was created with updated or corrected information. The report now shows certified net assessed values as of Aug.14, Montgomery said.
Base values determine the tax base for what a fire department, library, law enforcement agency or other tax-supported unit will receive during the lifetime of a TIF district. For that reason, tax increment financing districts remain controversial and unpopular with many local residents.
Bartholomew County Commissioners chairman Larry Kleinhenz expressed satisfaction at how the trigger change alerted county and state government of the discrepancy.
“It’s a good check and balance, and it’s our experience that it needs to happen,” Kleinhenz said. “Things can change and errors can be made.”
