This past Monday evening, the Westfield City Council and the Westfield Washington School Board held a joint meeting. Such meetings are not unprecedented, but they are pretty rare. During my four years on the City Council I can remember only one such meeting.
The purpose of the joint meeting is to maintain an open line of communication between the two organizations and to ensure that all are aware of the major issues. They really ought to be at least an annual affair.
Although I didn't attend, I have spoken with participants and audience members and can relay some of the highlights.
This meeting was hosted by the City Council and so it occurred in the City Hall meeting room where the City Council customarily meets. Generally, the home court advantage alternates from meeting to meeting. I'm told the room was fairly full, but the audience was primarily school and city employees. Only two members of the general public attended.
Not surprisingly, the School Board's major concern involved budget constraints. Declines in assessed valuation coupled with property tax reform have made things very difficult for the school corporation. Moreover, state mandated, all day kindergarten will add to operating costs.
A significant issue discussed involves the allocation of TIF revenues. Westfield had been one of a very few Indiana communities that did not absorb 100% of the revenue generated from TIF districts. Until recently, our practice had been to split that revenue in such a way that the city received 75% and the remaining 25% flowed through to all the other local taxing authorities such as the school, the library, the township, etc. However, with some major infrastructure needs looming in the near future, the city decided that it needed the full amount of the revenue created by the TIF districts.
The school naturally questioned that decision. The Mayor explained that the only way Westfield will be able to grow its AV (assessed value) is to make road and infrastructure improvements to attract businesses to locate here. The city needs the full amount of the TIF revenue to do that.
Growth in AV will result in growth in revenue. The property tax rate is applied to the assessed value of all the real estate in the township to come up with the amount of property tax owed by each parcel owner (subject to tax caps, of course). If AV declines (as it has during these troubled economic times) and the tax rate remains steady, then revenue will decline.
The way to increase revenue is to increase either AV or the tax rate (or both). Clearly, increasing AV is the preferred course. If AV is grown enough, it's possible for both tax rates and tax payments to decline. That's why it's so important to attract economic development to Westfield.
Unless you are knee deep into local government finance on a daily basis, it's very difficult to really understand the nuances involved. I've only ventured into these waters up to my ankles and the breadth of my knowledge (or lack thereof) certainly reflects that.
I believe it was good for the School Board and the City Council to have a face-to-face discussion. It should probably happen more often.
2 comments:
Ken! These posts are bumming me out! Sounds like we have a spending problem, not a tax problem.
Shoot, I hate to be bumming you out. I'm optimistic that the Grand Park model will work. I think we are very close to seeing a flurry of building activity around the campus and that can only help our situation. As the saying goes, sometimes you have to spend money to make money.
My understanding is that, so far, all the advancements made by the city in the last four to five years have come with no negative impact on actual property tax bills. The same cannot be said for the school corporation, which, on top of already representing 80% of your property tax subject to the tax cap, convinced us to vote for their referendum--an additional cost above and beyond the 1% tax cap for residential property owners.
Post a Comment