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The 2012 Indiana Senate Bill 25 proposed significant reforms for redevelopment commissions and departments.
General Assembly legislation is Taxpayer Friendly if it is results-oriented, compassionate, and fiscally conservative. SB 25 was Taxpayer Friendly because it would have provided much improved oversight over redevelopment commissions and departments by (a) the legislative or fiscal body of the taxing unit that created a redevelopment commission or department, (b) the State Board of Accounts, and (c) everyday Hoosiers through the public meeting and public records laws.
Under SB 25, the legislative or fiscal body of the taxing unit that created a redevelopment commission or department would have improved oversight over the redevelopment commission or department.
(1) The annual budget and tax levies of the redevelopment commission or department would be subject to review by the legislative body of the unit.
(2) The redevelopment commission or department could not enter into any debt or lease obligation payable from public funds without first obtaining the approval of the legislative or fiscal body of the unit, with the exception if an obligation is for the acquisition of real property and the payments are for three years or less or the purchase price is less than $5 million. The legislative or fiscal body would be required to specifically approve the maximum payment or lease amounts as well as the maximum interest rate.
(3) The redevelopment commission or department would be required to provide to the legislative body of the unit at a public meeting all the information supporting the action the redevelopment commission proposes to take regarding the sale, transfer, or other disposition of property.
(4) If the amount of excess assessed value determined by the redevelopment commission or department is expected to generate more than 200% of the amount of allocated tax proceeds necessary to carry out the redevelopment or economic plans, the determination of the amount of the excess available to other taxing units would be approved by the legislative body of the unit. The legislative body of the unit would also be permitted to modify the redevelopment commission's determination with respect to the amount of excess assessed value.
(5) The redevelopment commission or department would be subject to the same laws, rules, and ordinances of a general nature that apply to all other commissions or departments of the creating unit.
(6) If outside Indianapolis, the treasurer of the redevelopment commission or department (or the secretary-treasurer of the redevelopment authority) would be required to report quarterly to the fiscal officer of the unit that established the commission or authority.
(7) The Indianapolis Controller would be the fiscal officer of the redevelopment commission and redevelopment authority in Indianapolis.
SB 25 also provides that a redevelopment commission, a department of redevelopment, and a redevelopment authority would be subject to audit by the State Board of Accounts.
In addition, a redevelopment commission, a department of redevelopment, and a redevelopment authority would be covered by the public meeting and public records laws.
The importance of SB 25 is demonstrated by the Lebanon Redevelopment Commission that operates the Lebanon Business Park tax increment financing (TIF) district. Three of the five voting members of the Lebanon RDC are appointed by the Lebanon Mayor, whose control of the commission outcomes is further enhanced by his legal authority to "summarily remove" his appointees at any time.
There are sufficient Lebanon Business Park TIF funds to retire the remaining TIF debt and terminate the TIF district. The release of the TIF assessed value from terminating the TIF district would lower all Lebanon property taxes by at least 5.5 percent (and lower all Boone County property taxes by a lesser amount) by reducing those property tax rates computed by dividing budget requirements by $100 of assessed vale. Also, those Lebanon and Boone County property tax components computed by a fixed rate per $100 of assessed value could have their rates lowered because the computed revenues would increase due to the increased assessed value from the terminated TIF district.
The Lebanon Mayor refuses to let the Lebanon RDC terminate the TIF district to benefit the property tax payers of Lebanon and Boone County. Instead, the Lebanon Mayor has used TIF district proceeds the past five years for various outside-of-district expenditures that vary from a Lebanon Fire Department ladder truck, three Lebanon Police Department police cars, a Lebanon Street Department bucket truck, a new fire station, $1.5 million for agricultural-themed translucent panels on the Indiana 39 bridge over I-65, $500,000 to help fund a 9,600 square-foot "event center" at Lebanon High School, to $140,000 to pay back taxes so an abandoned motel can be demolished.
The improved oversight requirements in SB 25 would better expose the Lebanon RDC operations to the light of day and improve the chance of taxpayer benefit instead of continued discretionary spending by the Lebanon Mayor.