From: Thomas Heller
Columbus
Michael Leppert, a columnist and lecturer at Indiana University, recently shed light on the $5 billion in taxes already paid and collected that the state of Indiana has amassed in a budget reserve fund (“Indiana still shouldn’t hold a pile of our money,” Jan. 29). That is money now bubbling over 12.5% of general-fund spending levels and triggering an automatic refund to state taxpayers. Leppert argues that the state should not be in the business of stuffing a piggy bank with our taxes.
I agree, but Leppert apparently is unaware this same thing is happening at local governments although it is far less visible — and far less reported — than the state’s bulging coffers. It is just as real, however, with many, many tens of millions of tax monies already paid and collected accumulating in various bank accounts with no plans to spend it.
Here, one TIF (Tax Increment Financing) district last reported an end-of-year cash balance of $19.6 million, growing by several million dollars a year. They apparently can’t spend it fast enough. I have elsewhere projected it will amass $40 million in unearned tax revenue.
Another TIF district is collecting tax revenues at three times the rate of its ongoing annual debt service. Ordinarily, bondholders are satisfied with a 25% bond reserve. But at this pace, this district will build up another $40 million reserve; it’s already reached $16.8 million.
And a third TIF district has just been formed. The bonds it plans for won’t even draw upon its TIF revenues but that TIF already has laid claim to new tax revenues from virtually all the developable commercial property for the next quarter-century. Just another way to accumulate money beyond the public’s view.
That’s just in the city.
The county has a TIF that won’t be able to address the increased truck traffic its development will necessitate. The county has already granted abatements to the trucking firms who’ve committed to build terminal facilities there.
With all these special funds collecting taxes and stashing that money into idle bank accounts, we have to wonder who’s in charge here? And just exactly for whose benefit is this being done? Those are pertinent questions because we’ve seen the consequence: My city’s property tax rate has risen 36 percent since all this started.
Maybe Michael Leppert can suggest a remedy.
