WEST LAFAYETTE, Ind. (WLFI) – Tax increment finance, or TIF districts, are developed by local government to create tax incentives to bring development to the area. Money in the districts is then used for projects that would improve economic development in the area.
“Within the last couple of years [a] TIF district has helped build Cumberland Avenue phase one, Cumberland Avenue phase two, and this year we are going to spend money on Cumberland Avenue phase three,” West Lafayette Redevelopment Commission President Larry Oates said.
Oates said the Cumberland Avenue project is just one of several projects three TIF districts in the city have helped fund. Others include fire station three and Wabash Landing.
The city created two more TIF districts last month along the new U.S. 231 corridor.
Oates said a bill that could dissolve three of the city’s TIF districts makes no sense. Senate Bill 118 says any TIF district created before 1994 that does not have any debt will be dissolved in 2025.
“I don’t know if [legislators] know what it really does, but it forces TIF districts to take on more debt,” Oates said. “Here in West Lafayette we managed to do all these road projects and stuff using current funding methods, not bonding anything.”
Republican Senator Ron Alting (District 22) said there has been a push among legislators to control TIF districts after they saw some get out of hand. Alting voted against the bill.
“Of 92 counties if you have a couple that abuse the TIF districts, go after the local elected officials who administrate it, who collect it, who vote on how all the monies are funded, that’s where the punishment could go, but don’t punish all the other 90 counties,” Alting said.
“The specific one is down in the Carmel area,” Oates said. “The Carmel TIF districts almost went bankrupt had their city council not stepped in and backstopped their TIF bonds.”
The bill passed both the house and senate. Oates said if the city’s TIF districts dissolve new ones can be created, but it takes close to a decade for a TIF to develop money for development.