Skip to comments.Walnut schools would lose with TIF [Southwest Iowa]
Posted on 10/13/2010 8:59:48 AM PDT by Grit
County roads could benefit from tax incremental financing on wind generators in northeastern Pottawattamie County, but local school districts would be the loser, according to at least one Walnut school board member.
Shannon Griffith, school board president for Walnut Community Schools, said he had concerns about the plan and personally feels that it should not go forward.
This is taking money from two school districts to perform road maintenance in the county, he said. It is not the proper use of TIF law as far as Im concerned, and I have made contact with our school attorney to take a look at it.
Supervisor Chairman Melvyn Houser, Supervisor Lynn Grobe, Pottawattamie County Planning Director Kay Mocha and County Engineer John Rasmussen attended the Walnut City Council meeting Thursday to discuss the proposed TIF agreement.
The wind generators are in two school districts, 18 are located in the A-H-S-T Community School District and 93 in the Walnut Community School District.
The county would need to enact an ordinance by Dec. 1 to start the TIF zone with a base year of zero percent.
Under Iowa law, the county is not able to levy property taxes on the net acquisition cost for the wind turbines the first year. In the second year, the county can tax 5 percent of the acquisition cost, a figure that increases 5 percent per year up to 30 percent of the acquisition cost in year seven, at which point the taxable value is capped through the 20th year.
If the county were to enact TIF in the second year, the 5 percent figure would be used as a base, and the school districts would capture their portion of those taxes moving forward.
* Currently, Houser said the lands tax base value is as agriculture land. If a TIF were created, the county would capture any value above the base value. If a TIF area were established by Dec. 1, the county would capture all of the tax money from the area, above the base value and less the school districts debt service and physical plant and equipment levies.
Houser said a majority of the money, a maximum of 80 percent, that the school districts lose would be backfilled by the state.
Exactly what those tax and debt service numbers are is still up in the air, but Mocha said 5 percent of the wind generators acquisition would increase the countys property tax base by more than $17 million.
Griffith said that the Walnut City Council was consulted on the plan because some of the wind generators are located within the two-mile radius of the city. The council made no decision Thursday, but they will meet again at 8 p.m. Tuesday.
The school board has no say in the matter, he added.
The state will reimburse us, but it will make us less self sufficient and more dependent on state. Less help from state would be a good thing, and Im sure the rules will change between now and 20 years from now, he said.
If the TIF were established, the funds would be used in an Urban Renewal district which would also be created in the northeast portion of the county.
Rasmussen said he has identified $10 million in roads projects that the TIF-generated funding could be used for.
This sounds like yet ANOTHER Classic Culver and the Dems Screw-up! The Money is “Gone with the Wind”!
Schools should be focusing on RIF, not bullshit like TIF.
This may seem like a rather complicated tax issue.
In a nutshell, Pottawattamie County is taking property tax revenue from two school districts for up to 20 years to perform routine road maintenance in the county. And calling it economic development.
These “Urban Renewal Plans” give the county the power of eminent domain within the Urban Renewal Districts boundaries and makes the county the sole taxing authority for up to 20 years.
Two previous articles on this topic are archived at a local website:
The TIF / Urban Renewal law swiss cheese is the fault of Des Moines, and has been the suspected of much abuse throughout the years.
But this issue is the Pottawattamie County Board of Supervisors (most Republicans, I believe) doing the money-grab.
TIFs don’t “take” taxes from schools; the amount of tax on the property that was paid to the schools before the development is still paid to them. The increase in property tax is diverted to pay for the infrastructure. The schools don’t get the benefit of the increased assessed value, but don’t “lose” anything either.
Having said that, TIFs should be used very carefully and judiciously. They do constitute crony capitalism as the state favors certain private developers by building their infrastructure with tax funds. Also, if the development “goes south” the taxpayer is left holding the bag for the bonds that paid for infrastructure, but there is nobody there to pay the property tax on the improvements to support the bonds.
I grew up in Pott. County!! McCelland to be exact. Funny to see a post with the CB Nonpareil as a source on FR. Small world.
Full disclosure: This is my home and my school district.
This windfarm is already built. Built by private enterprise by negotiating leases with local farmers for the land.
The development is done and has been for two years. Now the county wants the “increase” that they had no part in creating.
Your points would be valid if this were a run of the mill TIF that would be created to bring “value” to the community.
This is retroactively “capturing” value that already exists.
As it stands there are no bonds on the project now. This would be creating a bond to borrow against the future value of a development that has already happened.
All politics is local, after all. :) I was just in McClelland a few days ago.
Walnut was my home town and my dad still lives there. Only a small district of 800 people at the far end of the county. The county wants money and looked at revenue from this source.
County govt dumping on th esmall cities.
McCelland....nice little town.
Both my kids were born in Co. Bluffs.
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