Tax increment financing is being used more intensely in St. Joseph County than in any other county in Indiana, according to a new Ball State University study.
That means the county is in first place or last place, depending on your perspective.
On its surface, tax increment financing — or TIF — sounds like bland government jargon, but there's a lot of money in it.
TIF is the primary way that Indiana communities pay for things such as wider roads, utility extensions and environmental cleanups that help attract business investment. When a city or county establishes a TIF district, and property values rise inside that district's boundaries, the incremental increase in tax revenue can be used to assist development in the district.
Almost 15 percent of the taxable property value in St. Joseph County is being captured by TIF districts in Mishawaka, South Bend and unincorporated areas of the county, according to the Ball State study. That's the highest percentage of any Indiana county.
Many government officials argue that TIF districts attract development, and TIF is the only tool they have to pay for the infrastructure needed to service large-scale projects such as factories and shopping centers.
Bill Schalliol, the economic development director for St. Joseph County, said state lawmakers created TIF decades ago to pay for things the private sector couldn't feasibly do — such as expanding a municipal sewer system or removing pollution from an old industrial site.
"It was set up to be that bridge between the public and private sector," Schalliol said. "TIF is one of those tools that, if used wisely, can make projects happen."
Scott Ford, the executive director of the South Bend Department of Community Investment, said TIF has helped the city pay for environmental remediation on properties and in buildings that otherwise would have been too expensive for a private company to redevelop.
"It's hard to envision a scenario where the private market is going to step in and address brownfield issues," Ford said.
The economists who authored the Ball State study counter that TIF districts are capturing tax dollars from economic activity that would have occurred with or without a TIF district.