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Indiana mayors ask state lawmakers to stop proposing legislation to restrict TIF districts

A panel of mayors spoke at the 2021 Dentons Legislative Conference. One of the things they asked Indiana state lawmakers was to not propose legislation the would restrict the use of TIF districts. (Brandon Smith/IPB News)

Listen to the broadcast version of this story.

State lawmakers have repeatedly proposed legislation that would restrict local governments' ability to use Tax Increment Finance (TIF) districts to improve communities and attract businesses. A panel of mayors from around the state recently talked about the benefits of the districts and the need for them.

The economic development tool is used by local governments to fund projects that will attract businesses and jobs to a specific area. TIFs take a portion of sales and property taxes from an area or business and put it into a special fund to offset some of a project's costs for developers.

A study by Ball State economists in 2016 was critical of TIF districts and said they were diverting as much as $320 million annually from other local services including schools.

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But local leaders stand by the districts. Hammond Mayor Thomas McDermott Jr. said when talking with prospective businesses looking to come to Indiana, TIFs are one of the incentives asked for.

"Without that TIF money, I don't know how we’d be able to get the job done," said McDermott. “And we would tie our hands in respect to competing with other states, you know, like Ohio, like Illinois, like Michigan, like Kentucky. If we limited the amount of TIF money that mayors were able to use to get these projects done, we would lose economic development.”

The mayors also urged state lawmakers to let local governments have more control to make decisions best for their communities.

Contact reporter Samantha at shorton@wfyi.org or follow her on Twitter at @SamHorton5.
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