GRAND ISLAND — It’s rare to go to a Grand Island City Council meeting without finding an agenda items concerning a proposed Tax Increment Financing (TIF) project.
Grand Island Public Schools’ Chief Financial Officer, Virgil Harden, told the Board of Education Thursday night, April 11, that Mayor Roger Steele recently asked the district’s Facility and Finance Committee if the district had an official position about TIF as used by the city.
Steele has commented at several City Council meetings that he wonders if TIF projects are adversely affecting funding for GIPS students.
Harden’s presentation was an information item only, and the Board did not taken any action on the topic.
Harden prepared a two-page document about TIF.
He first gave three points supporting TIF.
“TIF is an important economic development tool that helps the city grow,” he wrote, “albeit in an unregulated fashion. What comes in is what anyone with the means to bring forth a blighted study and therefore, a possible TIF project deems desirable.’
He noted that the school district is facing a labor shortage, and the city is experiencing a severe housing shortage.
He then listed six points against TIF.
First, “TIF, in essence, is a form of a wealth transfer mechanism flowing from the property taxpayer to the developer/owner. The developer/owner receives both near and long-term financial benefit at the expense of all other property taxpayers who in turn pay higher taxes on their properties while the TIF is in play.’
‘TIF adversely impacts GIPS, especially residential projects, because enrollment increases in nearby attendance centers. The expense of educating additional pupils is not supported by the property under TIF until such time as the TIF project is completed,” Harden wrote.
‘This argument is, in part, negated due to the fact that GIPS is an equalized school district under the current Tax Equity and Educational Opportunities Support Act (TEEOSA),” he wrote. “A counterpoint can also be made that the State of Nebraska has not fully funded the TEEOSA funding formula for schools. The result is TIF projects do have a negative.
Third, “the standard to find a property blighted is low and easy to achieve, and therefore, TIF projects are relatively easy to obtain.”
Fourth, “While TIF projects impact GIPS, we have zero ability to control the process as other governmental bodies (i.e. City of Grand Island) or Quasi-Governmental boards (i.e. Regional Planning Commission) have total control and authority.’
Fifth, “there can be a perception of lack of transparency concerning TIF projects because of the structure of the process currently. Communication between the Regional Planning Commission is good, but the timeliness of communication could be better.”
Finally, “it appears that each and every TIF project that is brought forth is approved and funded.”
Harden then listed talking points concerning TIF.
“The controlled use of TIF projects for the redevelopment of commercial property is highest and best use of TIF in our opinion,” he wrote.
“The redevelopment of small scale residential projects makes sense to us, again on a limited basis and with appropriate planning,” he wrote.
“Uncontrolled use of TIF for residential projects is not in the best interest of the patrons of GIPS,” he wrote.
Then, Harden wrote about two key points.
‘A City of Grand Island control development plan where the City finances the infrastructure and places a construction lien on the lots until such time as they are sold makes the most long-term sense to GIPS,” he wrote.
“We are open to continue dialogue concerning TIF and the power it has as an economic development tool and the impact residential development projects have on GIPS,” Harden wrote.
Finally, “Few, if anything operates in a vacuum, and clearly TIF doesn’t. Therefore, GIPS stands ready to more fully explore TIF as a viable economic development tool when used with planning, control, and purpose.”
