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TIF retirement results a challenge to North Spencer finances

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State legislature to consider fix

By DON STEEN

Staff Writer

reporter@spencercountyjournal.com

 

SPENCER COUNTY – The early retirement of the AK Steel Tax-Increment Financing District last June has resulted in an unforeseen budgetary concern for North Spencer School Corp., which has sparked a push for a technical fix in the state’s tax code. The Spencer County Commissioners and Council met in an emergency meeting March 12 to endorse legislation, which would have alleviated those concerns, but the legislative session ultimately closed without action on the matter. However, Superintendent Dan Scherry is hopeful the matter can be resolved during a special session of the General Assembly in May.

At the heart of the matter is the school district’s Capital Projects Fund, which paradoxically faces raising somewhere between $600,000 less than they otherwise would due to the way the Department of Local Government Finance determines rates and levies. Scherry explained that when the TIF district was dissolved, the assessed value for the school corporation jumped from around $711 million to more than $900 million, which in theory should have been a positive. The intricacies of state tax law and local finances complicate matters, however.

Of the five corporation funds raised in the county, four are levy based and only one, the Capital Projects Fund, is rate based. A levy-based fund is collected regardless of assessed value, so a jump in the latter figure results in a decrease in the tax rate required to meet it, and vice versa.