A law that goes into effect next month will require cities to consider giving back some tax money collected for economic development if they’re not using at least half of it every year. In addition, it shifts the final decision to elected rather than appointed officials.
This is a positive step toward reining in some of the excesses that have been shown in a few communities around Indiana.
When a business locates or expands in a tax-increment financing (TIF) district, the additional property taxes collected from the growth is set aside in a special fund. The cities can use the money for infrastructure and economic development projects, but the districts divert that revenue from schools, libraries, townships and fire districts.