News

IEDA CEO Lee Lewellen calls TIF a "critical tool" for economic development.

The Indiana Economic Development Association says a new study confirms Tax Increment Financing as a "beneficial tool" for economic development. The study was carried out by economists from the University of Southern Indiana and commissioned by the IEDA. It concludes that TIF districts have a positive impact on employment and wages, compared to areas not using TIF. The study also outlines "spillover" benefits for surrounding counties and calls TIF areas positive tools for quality of place-enhancing projects.

The organization says the analysis included a broader range of statewide TIF data than previous efforts, creating "more nuanced" results. It also considered numbers before, during and after the Great Recession.

Chief Executive Officer Lee Lewellen says legislators can use the research as a baseline for making decisions on crafting TIF regulations and local leaders can help decide whether TIF is the right option for funding a particular project. He adds the study busts one negative perception about TIF districts. "There have been statements made in the past that TIF districts are gobbling up lots of taxable property in the state of Indiana and competing with other taxing jurisdictions. But we found that when you look at TIF districts compared to all taxable property in the state of Indiana, TIF districts only account for 3 percent of all taxable property," said Lewellen. "That was maybe not really surprising, but it was good to have a confirmation that it wasn't as extensive as it really is."

One such study, released in February by the Ball State University Center for Business and Economic Research, suggested TIF districts are pulling away large amounts of funding from elsewhere, particularly local schools. CBER Director Mike Hicks said in that study, TIF is "not actually creating new investments."

The IEDA/USI study also highlighted over 250 changes to state laws governing TIF over the last 25 years. "The vast majority of these changes focused directly on addressing key issues like transparency, reporting and application, said IEDA Board Chair Jody Hamilton, "A key point is that TIF was found to be a useful economic development tool - one of a number of available tools - that is positively and uniquely responsive to individual community and regional needs."

Lewellen expects the research to serve as an independent benchmark.

You can connect to the full study by clicking here.

Indiana Economic Development Association Chief Executive Officer Lee Lewellen tells Inside INdiana Business the results can help craft future discussions.

By Dan McGowan, Writer/ReporterCONNECT
Posted: Jun 27, 2016 6:28 PM EDT
Updated: Jun 28, 2016 9:19 AM EDT