How should TIF funding be administered?

Johnson City Press • May 4, 2020 at 6:00 AM

Last week, the Washington County Commercial, Industrial and Agricultural Committee approved half the changes to a tax increment financing agreement requested by the Johnson City Development Authority.

The agreement between the county, the JCDA and Johnson CIty sets the guidelines for how the downtown TIF is run, governing how taxes collected in the district are used and shared, how economic development is incentivized and how decisions are made. The JCDA requested changes, mainly to how tax collections are shared and eliminating the district’s debt ceiling, to bring the agreement into conformity with 8-year-old changes to state law and practices by other municipalities in the state.

The full County Commission rejected the agreement update last year on the same night as a vote to use TIF funding to buy the John Sevier Center. Both the JCDA and the Johnson City Commission have approved the changes to the agreement.

According to county Finance Director Mitch Meredith, changing the tax contribution calculation would have saved the county $95,000 this year. Now, according to the current agreement, the county will have to approve a $82,592 budget amendment to satisfy the obligation.

CIA Committee members approved the financial calculations changes but not the elimination of the debt ceiling.

The changes were proposed to the committee as a single resolution, but were split after some commissioners complained they should not be linked, and said they felt JCDA members were dangling the debt ceiling issue over their heads.

In a previous meeting, JCDA leaders said the changes were proposed as a complete agreement, not separate issues. The debt ceiling was eliminated in the agreement, they said, on urging of a consulting attorney, who said no other TIF district in the state was limited by an on-paper debt ceiling.

If county commissioners believed the district had taken on too much debt, they could choose not to approve borrowing for a proposed project, according to the JCDA. Each TIF project is approved by the three member boards separately.

We’d like to put the question to you. Should the County Commission approve the changes? Should it approve one and not the other? Should the JCDA amend the proposed agreement to keep the debt ceiling? How should TIF funding be administered?

Send your answers to [email protected]. Please include your name, telephone number and address for verification. Letters may be no longer than 300 words and will be edited for grammar, style and length.

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