The director of the Ball State University Center for Business and Economic Research says a new study suggests a common funding method pitched by local governments as an economic development tool is "not actually creating new investments." Mike Hicks says Tax Increment Financing Districts are overused and pulling away large amounts of revenue from other service areas, especially local schools. Hicks says, while more redevelopment commissions are turning to TIF Districts throughout Indiana, other states have "radically curtailed" their use.
The report suggests TIF Districts capture up to $320 million in funding from Hoosier communities each year. The study says the funds could be used elsewhere. Hicks adds that CBER data show TIF use has no economic impact on the average TIF District in the state.
CBER Director of Research Dagney Faulk says for every dollar lost since the state imposed property tax caps several years ago, local governments have given away up to 41.5 cents in revenue each year to redevelopment commissions. "For communities that struggle to provide bus services to schoolchildren, this may be an especially acute problem. The likely school share of this TIF capture is sufficient to pay 2,400 teachers or operate and staff a full 900 additional school buses each year."
You can connect to the full report, which includes a county-by-county breakdown, by clicking here.
He tells Inside INdiana Business as much as $320 million is being captured each year by local governments through TIF.