Tuesday, August 14, 2007

Eugene White: TIFS And Abatements Do Affect Taxes

IPS Superintendant Dr. Eugune White laid out to the Kenley Commission the big impact tax abatements and TIF districts have on his school district. He told the Commission that one-third of the real property in his school district has been removed from the tax rolls--and that's not counting all the government-owned property. His school district also lost $600 million in revenues as a result of the business inventory tax, which Marion Co. took no steps to replace. "While some school districts are debating whether to build athletic facilities, thousands of IPS schools will start school without air conditioning and we have been praying for colder weather and the latest report is we may get a break before Wednesday," WTHR quoting Dr. White.

A common refrain from Mayor Peterson and other local politicians in response to the Marion Co. property tax debacle has been to blame the schools, which make up about one-half of your property tax bill. But the City-County government, through the Metropolitan Development Commission, gets to pick and choose who to take off the property tax rolls. For every taxpayer they remove from the tax rolls, other taxpayers have to pick up that much more in taxes to compensate for the loss in property tax revenues. It's not a zero sum game. It's also the case that Center Township, which comprises most of IPS, has more tax-exempt property than any other township in the state of Indiana.


Anonymous said...

If you watched his presentation, he was not there to bash abatements. Rather, he noted the large number of EXEMPT properties in center township which include government and nonprofits. Should not these properties be paying THEIR fair share of what we, the center township taxpayers, are now funding?

Anonymous said...

With me you're preaching to the choir Gary. I have made several posts in the past about the incredibly high number of properties that are on TIFs and Abatements. The percentage given by Supt.White is actually about 4 years old as he took it from the same study on the situation I read.

Study after study after study on nearly every major city that hands out TIFs and Abatements like candy have their inner schools going to hell in a handbasket.

When a business want to locate to a city one of the most important things they look at is the quality of the educational system there. The ironic thing is, those same businesses don't want to have to pay for that educational system via property taxes.

Indianapolis gets what it pays for. Case in point is our main emphasis on the service and hospitality industry. We don't need PhD's to sling hash in new restuarants, clean rooms, pick up trash or park cars. If this is all we are educating students for in IPS then we're getting what we paid for. The 16 year old HS dropout is going to make the same money a HS graduate does doing the same job flipping burgers or sweeping floors.

Yes, we pay 50% of our taxes to IPS but that burden would be substantially less if businesses paid what we do.

Gary, you need to provide a link to the Indytaxdollars blog. He knows what he's talking about.

Anonymous said...

Abatements are only given on the increased value of land and personal property- what's better a worhtless piece of land not contibuting to the tax rolls, or a new building that will eventually add a lot to the tax rolls, helping to spread the burden?

Look at the Conrad- that was a government park not paying property taxes while bums slept there, not it will gradually come on to the tax rollls, benefiting all.

Anonymous said...

Businesses in center township pay 1/2 of all center township property taxes.

Advance Indiana said...

Anon 7:52, you are wrong on abatements. They are given on existing, improved structures as well with a promise of adding additional jobs or expansions to the existing improvements.

Anonymous said...

7:52, Since when during the last 15 years has any piece of property in the Mile Square been worthless?

As a taxpayer I don't want my goverment in the real estate business. They spend $10 millon on "worthless property" and sell it for next to nothing PLUS give the developer cash to boot.

Who owns the Market Square site? Wager to quess what it's fair market value is on the open market?

Anonymous said...

7:54, right now there is over $231 million in property taxes NOT being paid by downtown businesses.

Anonymous said...


Keep bashing businesses and see how many stay here or locate here...

Anonymous said...

Anon: 9:00
That is an absolutely insane comeback. If I follow it to its logical conclusion, then everything connected to commerce would be tax exempt. Some is necessary, but far too many we don't even know about are the result of smokey backroom deals between the power brokers. Bank on it.

Anonymous said...

I am sympathetic to Dr. White's concerns about losing tax base that affects IPS. As a homeowner in this school district I share the same concerns. However, the IPS school construction plan is too much. There is always a mention about the air conditioning, but these elaborate reconstruction plans go far beyond that and if you notice, there is a huge project underway at the IPS Administration building. Seems to me that air conditioning for the older buildings should have been a higher priority than a parking garage for the Administration building.

Karen Goldner said...

"They are given on existing, improved structures as well with a promise of adding additional jobs or expansions to the existing improvements."

I think you are overstating this, Gary.

By definition, an abatement is a phase-in of the increase in assessed value due to new improvements.

If I have an existing building and want to expand it so it can house new employees, then I may be granted a tax abatement. If I expand the building, then I continue to pay the taxes on the previous assessed value, and the taxes due to the increase in assessed value are phased in over a period of time (typically 10 years). However, if I do not expand the building, there are no improvements which would increase the assessed value, so there is nothing to abate. As a result, I get no savings on the increase, since there is no increase.

If I plan to hire more people without increasing assessed value (by building or expanding a building, or buying certain types of capital equipment), then I cannot qualify for an abatement. Again, there is nothing to abate if there is no increase in assessed value.

Anonymous said...

As a small business owner, I'm fighting to stay alive with all of the Walmarts, Krogers, Lowes of the world. I have 8 employees and earn no wage as of yet for myself. Continuing to increase my property taxes to pay for sports arenas, weight trainers, expanding expense budgets for education? I don't see most of the kids appreciating the free education, free lunches, etc. It's very important for them to receive an education!

I love my customers and staff as a small business owners and desire to give them more personal service, but all the expenses of FUTA, SUTA, Unemployment taxes, property taxes, inventory taxes, time to track of this and report it make it difficult. We don't have the loopholes of corporate America to divert these expenses.

Anonymous said...


That's how much IPS spent last year per student. But Eugene White says that's not enough.


Remember that number every time he complains. It will be higher this year. And even higher the following year.

But according to White, it still won't be enough.

Anonymous said...

Why can't IPS get together with the Washington Township folks and take over school buildings that they will be closing that are already air conditioned?

When I went to school in the 1970's, we didn't have A/C and no one complained about it. We opened the windows. That's just how it was.

I guarantee that I was a better student in the 1970's without A/C than the average student in IPS is today.

Old Grouch said...

Yeah, but when you went to school in the 1970s they didn't start classes until after Labor Day.

Gotta have that air conditioning so they can start school early enough to get in those three extra football games, y'know!

Anonymous said...


That's how much IPS spent last year per student. But Eugene White says that's not enough.

The above statement is simply untrue. Sounds like the fuzzy math of a certain ilk who like to inflate their figures via faulty calculations.