Schools give qualified thumbs-up to TIF
Projects would affect district’s tax revenue.
By: Jonathon Braden, May 4, 2009
As Columbia Public Schools’ interim superintendent, Jim Ritter understands the benefits of tax increment financing, including more downtown development in Columbia, and its drawbacks — for instance, having the same property tax rate for up to 23 years on a project.
As the city’s largest benefactor of property taxes, no public entity would be affected more by TIF than Columbia Public Schools. School officials insist they want to support growth in Columbia, but they say they also want to get their fair share of that expansion. “We’re kind of caught in the middle,” Ritter said this morning. “We want downtown to be the best it can be. But at the same time, funding for our schools is equally important.” Ritter and Board of Education member Tom Rose represent the school district on the city’s TIF commission. The commission will recommend to the Columbia City Council whether developers should be able to use increased tax revenues to fund projects.
The commission has received two applications for development projects: the Tiger Hotel project, a restoration effort led by developer John Ott and partners Dave Baugher and Al Germond; and Nathan Odle’s multistory retail, office and residential building at Tenth and Locust streets.
The school district receives about $18,000 combined in property tax from the properties being considered, Ritter said. If the TIF projects were approved, the property taxes to schools could remain the same for up to 23 years. “For 23 years, those tax moneys would go back to the developer,” Ritter said.
At a Tuesday TIF commission meeting, Rose said he would support encouraging developers to use TIF financing for a shorter period than the state-approved 23 years.
Taxing entities such as the school district would then benefit from the project quicker because once a developer has the amount of taxes needed to pay back development costs, the property and sales taxes the project generate begin flowing to the schools and other taxing entities. Ritter said TIF projects could mean more proposed tax increases on ballots. Because much of the school district’s funding comes from local sources and the district would not be benefiting from the development, “we want people to understand we may have to go back to our taxpayers more often,” Ritter said.
TIF projects could spur surrounding development, though, increasing the amount of property tax paid to the schools. Overall, the district would gain money from the neighboring development and would not lose any of its current property taxes from the TIF projects, which has school officials generally supportive of TIF. “I feel like it’s a good thing,” Rose said at the commission meeting. “Speaking for a taxing entity, what we might ‘lose’ ” from TIF financing “we hope to gain in the other developments around there.”
At the TIF commission’s June 4 public hearing, the school district will offer an official comment to the commission, Ritter said.
Tribune reporter Sara Semelka contributed to this report.
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