Author Archives: njohnson

Demand Inclusion: Bill Crawford at KI

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by Nicole Johnson

On July 24th, Representative Bill Crawford from the 98th district came to speak at KI EcoCenter. This is Mr. Crawford’s last of 40 years in office, and because of his political expertise, he was asked to sit on the TIF Study Commission (please see my previous blogs to learn more about TIF). The Study Commission was created to examine TIF polices and processes and to make recommendations to amend some of the issues that have arisen in the past which better processes could address.

As a government representative with extensive experience, Crawford is well informed on TIF policies, and has been able to see both the positive and negative outcomes of Tax Increment Financing. He believes TIF is a useful tool in economic development, but can easily be misused because of loopholes in current guidelines pertaining to accountability and transparency. Crawford mentioned that, in the past, TIF has been used as a way for wealthy individuals to finance personal projects without personal risk. Instead of investing their own money, these individuals or groups have been able to use public funds to subsidize their ventures. In light of this, he calls for more resident engagement and strict policies that will hold both “investors” and the Community Development Corporations that manage the money accountable.

Crawford says that in a TIF district, all new developments will contribute the entirety of their property taxes to the TIF fund. There are TIF districts in existence now that have been around for decades, meaning that, instead of contributing to the general tax base, all businesses or housing that have developed in the area since the inception of the TIF district have contributed their property taxes to repaying TIF debt or funding future development. The TIF Commission recommended that no TIF district be able to extend past 25 years, meaning that these allocation zones can no longer have indefinite sunset dates.

According to the Commission’s recommendations, all TIF proposals have to be pasted through the City-County Council. However, while at one of the Commission meetings,  I listened to Crawford and another member go back and forth about whether or not that should be the case, Crawford arguing that the council should approve all TIF districts and the other gentlemen citing that it was not required in the past and should not necessarily be required now. Although the Commission has made several recommendations to increase accountability and transparency, there is obviously still contention about whether or not these processes should be required. The recommendations have been made, but they are just that, recommendations. There is no guarantee that these recommendations will be implemented, and if they are, does that mean that the new policy will be followed?

During the June 28th Commission meeting, Crawford voiced concern about the procedure for informing residents about TIF implementation, saying that many residents in his district were unaware of TIF allocation zones and were even confused about what TIF meant. However, his view is not one sided. While at KI, he mentioned that as residents, we should work to keep ourselves informed as well. He encourages us to get to know our Representatives and Counselors so that we can stay updated on new developments in our respective areas. With this in mind, regardless of whether the recommendations are considered or followed, we can do our part to stay involved in the process.

Crawford supports Tax Increment Financing, and believes it can be used to better Indianapolis and foster economic development. His participation on the TIF Study Commission has helped give voice to the concerns of residents across Indianapolis and has hopefully impacted the way TIF is used in the future. Despite the uncertainty that has grown concerning economic development, and TIF, Crawford encourages us to not only build a relationship with our area representatives, but to also hold our CDC’s accountable. He affirmed that it is up to us to get involved and demand transparency so that these public funds are used for the public good.

 

The People Priority

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TIF and other economic development methods can be useful tools in improving the quality of life, business opportunities, and aesthetics in a community provided that they are implemented with each of those goals holding appropriate weight. Economic development can either succeed by replacing residents with more economically advantaged inhabitants, or by providing resources so that neighbors can prosper because of the economic trend.

One solution to mitigate the negative effects of TIF is to create a clause that prohibits an increase in property tax for the current residents. Certain residents, who have lived in the community for a given amount of time (whether that is five years, ten years, or some other determined number), would be “grandfathered” into their current tax rate at the time that the TIF district is created. The tax cap would endure for a specified number of years; this would allow current residents to benefit from the economic advancement in the area and give them time to “catch up” with the trend.

Nonetheless, time itself will not provide a cushion that can protect households and individuals from being displaced when the period has transpired. Economic development agencies and CDCs need to actively provide resources for individual economic progression. In the Mid-North area specifically, there are countless people with valuable skills that may not be recognized due to lack of accreditation, the absence of a certification, or a blemished record. There are master mechanics, electricians, beauticians, carpenters, etc. who may not have attended a formal institution but have acquired excellent skill through experience and serving their communities. If economic development initiatives can focus on capitalizing and improving these skills, residents can be employed in the mainstream market and new businesses will have a wealth of qualified employees to choose from in that neighborhood.

Currently, the TIF Study Commission recommends that a maximum of 15% of TIF dollars be allocated to job training and education. If policy makers increase that maximum to at least 30%, making affordable job training one of the main concerns, individuals can expound on their abilities and interests while attaining certification that will make their skills more marketable in the mainstream job market. These training programs should give residents who were “grandfathered-in” first priority acceptance, ensuring that long standing residents will be able to increase their own quality of life alongside aesthetic and business development.

This community has a wide variety of resources, that when polished can be used to serve both community members and businesses. Local hiring must be a priority and creating space for more locals to be able to compete in the job market is the first step.
Allowing time for people to attain and utilize resources and making said resources readily available for all those who wish to take advantage of them are the most important factors in creating an economic development plan that serves neighbors, businesses owners, and the economy.

 

“TIF DISTRICTS AND HOW THEY IMPACT TAXES AND ECONOMIC DEVELOPMENT IN MARION COUNTY”

If you are interested in participating in a discussion about TIF and the way it could affect your community, please attend the Marion County Alliance of Neighborhood Associations (MCANA) meeting this Saturday, July 21st, from 9am-11am. The meeting will be held at North United Methodist Church located at 38th and Meridian.

Go With the Flow: Community Building and Developing Relationships

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Throughout the last month, I have had the opportunity to connect with  several different groups of people and organizations through my work at KI. These interactions have given me valuable insight into the different ways people engage community and how that engagement can or should be measured. The question that arises the most through these conversations is: “How do we engage communities as outsiders?”

There is no cookie-cutter answer to this question, and the search for a one-size-fits-all community engagement handbook hinders ones ability to build relationships. Such a pursuit ignores individuality in “impoverished”, “underdeveloped”, or “blighted”neighborhoods where social justice minded youth converge to make change.

The idea of “help” also stands as a roadblock in building community. The statement “I want to help but I don’t know how” is thrown around in conversation. Help and service is traditionally seen as one sided. Volunteers often go into a community thinking they are going to bring value and information to the neighborhood without realizing the wonderful resources and lessons they can gain themselves.

We need to focus on building community instead of “helping” and understand that our way is not the only way. I was at a presentation today where the facilitator said it is easier to go with the flow of nature rather than against it. When you come into an area with your own agenda without respecting the culture and values of that neighborhood, you will cause more disruption than unity. Seek first to understand, and then to be understood.

Community building is not a job, and it is not a project with an end goal, it is a life style. When we look at community development through the lens of a project or experiment, sustainability can not be reached.

During my short time working with KI, I have expounded upon tools that I use in my everyday life to build relationships. For example:

When trying to engage a community as an outsider, you first have to engage community members. Get to know the community at an individual level instead of just a statistical one; actually build relationships for the sake of relationships, not just as a means to an end goal. Listen and open yourself up to learning; professors and professionals are NOT the only people who have something important to say. Recognize and respect alternative views of reality; the United States is a culturally pluralistic society, the popular model isn’t always the appropriate one. Furthermore, it is best not to impose yourself or your ideas on a community, work on  their terms, and your opinions are much more likely to be considered, maybe even received. And don’t work to hard to be accepted or people will see right through you! Be yourself and know not everyone will like you, and that is OK! Build trust and gain respect by knowing your boundaries as well as the boundaries of others.

Lastly, improvement cannot always be measured. Numbers are not able to capture everything, and sustainable progress can’t necessarily be made in 3 months, 6 moths, or even 2 years. Make community building the goal, and the issues that uphold the status quo in all of our communities, underdeveloped and elite alike, can be tackled simultaneously. This allows neglected residents to be empowered, and creates a space in the dominant culture for that agency to be received.

 

 

Trick or Treat?

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Tax Increment Financing (TIF) is a redevelopment strategy that allows development officials to collect property tax from the residents in the TIF district. First, the allocation area is termed a redevelopment district based on the amount of “blight” that is present in the area. According to the Economic Development Corporation of Wayne County, Indiana, TIF “enables local economic development officials to collect the property tax revenue attributable to increased assessed value resulting from new investments within a designated area (EDCWC). There are several ways to use TIF, one of which is a strategy where the increase in property tax (hence the term “tax increment”) that follows economic development, is used to retroactively pay off debt that the development projects themselves incurred. The increase in property taxes, which results from the higher assessed value of the neighborhood that the development catalyzed, is used to fund the projects already underway.  Additionally, TIF can be used to fund future projects, where property taxes are funneled through the redevelopment agency and they decide which projects to invest in. The revenue is collected by the development corporation and is used to fund development projects that will hopefully change the face of the community where TIF is instituted. Subsequently, in either case, the amount of money that the community contributes to the general tax base, which funds education and city services, is limited (Michale 468).

Although TIF is a creative model for funding infrastructure development and encouraging businesses to establish themselves in the redevelopment zone, several consequences follow that will quite possibly have a negative impact on the current residents of the allocation area. Certain aspects of the TIF model limit the community’s ability to both contribute to the process and hold the redevelopment agency accountable.

Catherine Michael, education attorney and graduate of Indiana University School of Law,discusses the negative impacts of TIF and the issues of community representation and agency in her article “Brother, Can You Spare a Dime: Tax Increment Financing in Indiana.”Michael argues that as new residents with “higher purchasing power” move into the neighborhood, they will be competing with existing low-income residents (Michael). According to Michael, “as the TIF area improves and costs rise, residents may be forced to move elsewhere, loosing housing, jobs, and contacts they had prior to the redevelopment project”(468). The state of Indiana may have a relatively low property tax, but when you consider that residents of the mid-north area fall well below the city’s median per-capita income of $23,049, any increase in taxes can severely burden existing residents along with limiting the number of tax dollars that fund city services. With gentrification under way, property taxes will rise as the “assessed value” of the neighborhood continues to rise.

As the area “improves”, and more new residents move to the neighborhood, the need for and cost of city services will rise but “the area will not submit any additional monies to the taxing unity until the entire cost of the development project has been recouped”(Michael 468). As long as funds are needed to finance the redevelopment projects in the area, city services will continue to suffer. Along with increased property taxes, the city may also need to implement higher taxes to “keep city services at a necessary level” as the population grows and new residents demand a higher level of services (Michael 468).

TIF as a redevelopment project sounds promising, but the majority of Indiana’s TIF districts incur debt (EDCWC). This debt can take up to 30 years to pay off! The TIF model creates an additional financial burden in areas already economically disadvantaged.

Michael states that “The ease of using TIF and the few restrictions it contains serves as further encouragement to city official to pursue…large projects rather than smaller ones which could improve the quality of life in low-income neighborhoods” (Michael 468). Development officials usually opt for the larger projects which may include shopping centers and office spaces which will improve the area’s image. Although this enables the neighborhood to compete with neighboring communities and opens up possibilities for future economic development, the sustainability of these projects encourages gentrification and depends on it to pay off the debt incurred by redevelopment projects. Instead of bettering the quality of life of residents, TIF is often used to improve the physical aspect of the community, generating more opportunities for development corporations and involved parties to profit from gentrification.

Many of the negative consequences of TIF occur because accountability and community agency is restricted by the TIF model. During the TIF process:

City officials and developers may work hand in hand on…important development projects to assure profits to the developer and further officials’ political careers. Public Private partnerships restrict the impartial decision making ability of city officials and reduce the ability of citizens to restrain government power….Important business figures…are likely to have more clout in the political process than low-income residents and can assert more influence on the outcome of development projects”(470).

Once again I pose the questions: Whose interests are served? And whose voices are marginalized in the process?

Stay tuned for possible solutions…

 

Works Cited

Michael, Catherine (1996) “Brother, Can You Spare a Dime: Tax Increment Financing in Indiana,” Indiana Law Journal: Vol. 71: Iss. 2, Article 6.< http://www.repository.law.indiana.edu/ilj/vol71/iss2/6>

http://edcwc.com/wp-content/uploads/Tax-Increment-Financing1.pdf

 

Sweet Tooth

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Everybody wants a piece of the pie

American apple, rhubarb

Very cherry pie

He took our land

The fruit from our trees

And said, “Eat this pie,

It’s what you need to survive.”

 

It tastes good

So we eat

Shoveling in as much as we can consume.

Diabetes, high blood pressure, cavities, obesity

And when heart disease sets in

He says, “You’ll be fine,

You just

Need

To eat

More

PIE.”

 

But I say: Give me the grass, the dirt

The leaves, the fruit from my trees

I’m tired of stuffing my face with greed.

 

The pie is poison.

Put down your forks.

 

 

Collateral Damage: Economic Development in the Mid-North Neighborhood

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During my second day as an intern at Kheprw Institute, I was invited to attend a meeting about economic development in the Mid-North neighborhood. Several community development corporations were in attendance, including the Local Initiatives Support Corporation (LISC) and the Mapleton-Fall Creek Development Corporation. This monthly meeting brings together development organizations located throughout the Mid-North area to discuss and collaborate on new economic initiatives for the community.

The purpose of this month’s meeting was to present and discuss three economic development plans: Reconnecting to our Waterways, Destination Fall Creek: a Mid-North Initiative, and the North Midtown Redevelopment Area TIF Discussion. The first two initiatives focused on the waterways and the economic advantage that could be extracted from the nearby Fall Creek, while the third discussed Tax Increment Financing (TIF) and how the Mid-North Area could benefit from certain “allocation areas” that would provide tax incentives for businesses in neighborhoods that are termed “economic development areas”.

Obviously, being an economic development meeting, the discussion of benefits focused on the monetary opportunities that could follow from these initiatives. Recreating Fall Creek into an area that would attract new residents and businesses would of course offer huge economic benefit to the area, increasing property values and subsequently property and income tax, which would in turn offer significant funding to sustain these initiatives. During the entire meeting, which was all of 90 minutes, no one mentioned the Mapleton-Fall Creek residents, essentially removing them from the development process. This idea of development separated the residents from the initiatives, creating a clear split between the neighborhood and the people that live here. No one seemed to be concerned with the question of what happens to existing residents when property values increase? Or, in the process of attracting new (I am inclined to assume more economically advantaged) residents, will current residents be displaced?

This historic neighborhood and its residents are inextricably tied. And while many of the organizations present at the meeting worked under the guise of crafting and maintaining initiatives that are important and pertinent to community members, they were able to effectively separate the physical community from the body that inhabits it.

Furthermore, the sustainability of these projects, specifically the ones involving Fall Creek, is dependent upon the expected outcomes: new residents and increased property values, pushing the effects on current residents into the category of collateral damage.

Economic development, and the opportunities it creates for gentrification, is not community development. It serves as a type of neo-colonialism, which acts to extract resources from a community for the benefit of some third party. Whose voices are marginalized in the process? And whose interests are served?

 

External Resources:
Reconnecting to Our Waterways

Tax Increment Financing

Destination Fall Creek