County panel approves changes to downtown tax district

Robert Houk • May 1, 2020 at 9:00 AM

Washington County’s Commercial, Industrial and Agricultural Committee voted Thursday to change the way the county’s contributions to cover improvements within the tax increment financing district in downtown Johnson City are calculated.

The resolution was approved by Commissioners Phil Carriger, Kent Harris and Jodi Jones after a previous motion that would have also increased the debt limit in the TIF district failed to pass.

Harris, who voted against the earlier resolution, told his colleagues he couldn’t support linking the debt issue with a change in the methodology for calculating annual TIF payments.

“They should be two separate resolutions,” said Harris, who added he didn’t like the way the Johnson City Development District seemed to be “dangling” the debt issue “over our heads.” 

Commissioner Freddie Malone, who serves as the County Commission’s representative to the JCDA, reminded committee members that the county, the JCDA and the city of Johnson City are partners in the downtown TIF district. He said changes to the agreement now being considered by the county have already been approved by the development authority and the city.

Those amendments would bring the downtown revitalization in compliance with upgrades made to the state’s TIF law in 2012.

A vote on those revisions stalled in a 7-7 vote by county commissioners in February 2019. Had the changes been approved, Malone said the county would have kept $95,000 in collections, and not owe $82,592 to the JCDA in the current fiscal year.

Malone said the JCDA would forgo that payment if the county adopts the new TIF calculating formula. He said the current method is “very disadvantageous to the county.”

Mitch Meredith, the county’s director of finance and administration, said the current method is based on assessed property value. The resolution would change that to the amount of the property taxes actually paid in the district, which would decrease the county’s contributions over the next nine years of the TIF.

Malone said the JCDA also wanted to see the county follow it and Johnson City in deciding to change the debt ceiling in the TIF district from a fixed dollar amount to a percentage of the overall property values in the area. He said the county would continue to have the power to approve or reject any project that comes up in excess of $25,000.

“So in my mind the second amendment relevant to the debt is inconsequential to the county,” Malone said. “We are not obligated for the debt.”

Even so, he told the committee that the two amendments were “an effort to bring the county in uniformity” with the state’s TIF law. The resolution will be heard Wednesday in the county’s Budget Committee.

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