Peabody-Burns Board of Education members attended a special meeting Monday night to consider a request by the city to create a tax increment financing district in Peabody. Before such a district can go into operation, a public hearing must be called and all other taxing districts affected by the TIF district must be notified of the city’s intent.
Monday night’s meeting was called to familiarize school board members with the nuts and bolts of tax increment financing.
A TIF district is established for a certain area in a community. The property taxes for all the residents or businesses in that district are “frozen” on the date the financing plan goes into effect. For a given number of years all the taxing entities supported by the residents or businesses in that district continue to receive the same amount of property tax they were receiving on the day the TIF district was established. If property values increase in that area and taxes go up, the city alone gets the revenue from the increase.
State law requires that those tax dollars be returned to that district in the form of improvements to the area. The funds may be spent on infrastructure, site improvement, or property improvements. The funds cannot be spent in another area of the city or on any project not specifically provided for in the state statutes.
The city wants the TIF district to align with the boundaries of the historic district downtown. Likely projects would include replacing water and sewer lines, curb and guttering and sidewalk replacement or repairs, upper story improvements, street light upgrades and replacements, weather-proofing and insulation issues, and other projects.
State law also provides for a veto option by those taxing jurisdictions that will not be on the receiving end of the additional tax money raised in the district. Any of those entities can veto the project within 30 days of the public hearing, which will take place at 7 p.m. Dec. 13 in the Peabody City Building.
Shane Marler and David Scott, members of Peabody Economic Development Committee were present at the meeting to explain the TIF district and answer board members’ questions.
County Commissioner Randy Dallke also was present to review the county’s position on TIF districts. Currently the city of Hillsboro is the only other community with a TIF district. Hillsboro has funded its Industrial Park with tax increment financing.
School board members took no action, preferring to study the information handed out at the meeting and attend the public hearing Dec. 13. A decision was tabled until a future meeting.