To the editor:
The discussions over the proposed Tax Increment Financing (TIF) district for Peabody have been an excellent example of the way government is supposed to work. Discussions are out in the open, everyone has a chance to weigh in on the issues, and the final decision is, hopefully, based on what’s good for the community rather than a particular special interest.
The Peabody Economic Development Committee identified TIF as a way to enhance the city’s ability to fund some needed repairs to the city’s business district. As property values in a particular area, such as the TIF district, increase because of economic development activities, the “extra” tax generated by those improvements are reinvested in the area via public works such as curb and street repair, sidewalk replacement, and utility upgrades. The trade off to this approach is that the “extra” tax revenues are not available to other taxing entities. Those most significantly affected are Marion County and USD 398.
The development committee presented its recommendation to Peabody City Council. Council members discussed the pros and cons. It was recognized that the TIF would not generate a lot of money — probably only $5,000 to $8,000 a year. The main advantage to TIF, however, is that funds generated within the TIF district are spent within the TIF district. This frees funds for improvements in other parts of Peabody. The city council decided to move forward on the development of the TIF district. As required by the enabling legislation, property owners within the proposed TIF district, the Marion County Commission, and the board of USD 398 were advised of the City’s intent and a public hearing was scheduled.
There’s nothing like a letter advising of a proposal to establish a new tax district to get folks’ attention. Questions started coming in to the development committee. A special school board meeting was called to discuss the proposal. There was a full house at the public hearing.
Questions and meetings provided an opportunity for a full and open exchange of information.
A few of the facts that were established were:
- As long as the appraised value of the properties in the TIF district remain at current levels or increase, tax revenues to the county, USD 398, and other tax supported entities will remain the same.
- At the point that the taxes on individual properties within the TIF district increase, the additional tax revenues will go into a TIF fund administered by the city.
- Money in the TIF fund will be used to support “infrastructure development” projects within the TIF district. The city has indicated that TIF funds will not be used to directly subsidize property owners or developers.
- Should economic development activities increase the collective value of properties within the TIF district by $200,000, approximately 10 percent, the combined tax of those properties would increase by approximately $6,850. Since all of this money would go into the TIF fund, Marion County would give up about $3,300 and USD 398 $3,100 in revenue each year. This represents 0.05 percent of the Marion County tax revenue and 0.3 percent of USD 398’s local tax revenue.
The County Commissioners and the school board have the authority to veto the development of Peabody’s TIF district.
I would hope they would be willing to risk a fraction of 1 percent of their locally generated revenue to support the City of Peabody’s efforts to revitalize our community.
David Scott, Administrator