by Kathy Tretter
Blake Voges dropped by the news office recently. This was prior to the fire that devastated the barn on his family’s property.
In the interest of full disclosure please note Voges is running for Spencer County Council, which is the county’s fiscal body. While commissioners form the executive branch, the council controls the purse strings.
I say in the interest of full disclosure because the Leader generally does not interview candidates this close to the election, but Voges brought up some key points that bear repeating, no matter who is elected on November 3.
“I like to describe our county’s largest fund, the general fund, as a pie,” Voges opined. “The pie represents how much money the county can collect. Every slice of this pie represents each parcel of land in the county. One might think if taxes go up the value of your house increases, or if a big factory comes to town, the county’s pie would grow, resulting in more money for the county — but that’s not how it works. The growth of the pie is regulated by the state annually, typically an increase of 2.4%. For 2020 our pie was $7,075,265. When a large factory or investment comes to town, its value to the general fund is not the tax it pays, but the assessed value it contributes to the county. As assessed value is added to that parcel, or slice of pie, that slice grows, making all the other slices of pie just a little smaller. The pie cannot grow, the state won’t let it. Our tax rate is determined by the size of the pie, divided by the assessed value of all the slices.”
In other words, more assessed value in the county reduces the tax rate, and less assessed value increases the tax rate.
Voges was particularly incensed when, a week before his news office visit, the Spencer County Regional Chamber of Commerce organized a special educational session on Tax Increment Financing (TIF), led by Tom Pitman, an attorney with Barnes and Thornburg in Indianapolis whose practice is concentrated in public finance and municipal law. Pittman has more than 30 years of experience serving as bond counsel, special tax counsel and underwriter’s counsel. His particular area of expertise is TIF. He literally wrote the book on understanding TIF, which is just one of the tools in a tool box, along with the more commonly used (in Spencer County) tax abatements.
Pittman came to Spencer County on his own dime to help elected officials understand all the tools they have available and Voges, who attended so he could understand the complexities, was surprised by the lack of interest from those who are paid to protect Spencer County’s best interests. Not one elected official attended.
Part of what Voges considered a disservice to residents was the dissolution of the TIF District created for AK Steel 10 years before it was set to expire. While this had been a decision of the Redevelopment Commission, had the council wanted to retain the fund for the benefit all Spencer County taxpayers it would still be in place. Currently the steel giant is behind in Spencer County taxes by $3.5 million and the county has been in litigation with AK Steel for several years over its assessed value (among other things).
Here is a simple explanation of how TIF works: Tax increment Financing is a tool used by municipal governments to stimulate economic development in a targeted geographical area. The area is designated and TIFs are used to finance redevelopment projects or other investments using the anticipation of future tax revenue resulting from new development.
When AK Steel decided to build in Spencer County, TIF was used to develop the property, which had originally been slated for residential development but was rezoned industrial. Funds that would have been captured during the final 10 years could have helped with needs such as the broadband initiative. This money could have benefited schools, even pay teacher’s salaries, according to Voges, who expresses frustration the county passed up on potentially $55 million in revenue by ending the AK Steel TIF 10 years early. “It kills me to see all those millions fall through the cracks.” Voges can, in detail explain how the loss impacted Spencer County as a whole, both financially and with an eye toward potential economic development. He is primarily concerned about the future of schools.
“Spencer County’s future is rooted in our schools,” Voges opined. “They are under threat. Enrollment for North Spencer has fallen by 16%. In South Spencer that number is 18%.”
He adds that since Spencer is a rural county with only small towns, a void exists because most counties have at least one larger municipality. These larger municipalities drive commerce and growth across a larger area. Because of this void Spencer County relies on county government more than most. “Counties are not structured the same and municipalities and are not equipped to address the challenges or opportunities of cities and town.”
“This scenario seems to be taking its toll in the 21st century,” Voges noted. “Spencer as a county is doing alright. The rural economy is also doing alright. The same cannot be said for the towns. These old towns have few tools to work with compared to larger municipalities. The potential decline of these small towns could leave the county in a less than desirable situation. The Spencer County rural lifestyle is very desirable for families looking for just that. This lifestyle requires services and amenities not found in the rural county. Schools, food, fuel, entertainment, community activities, and day care to mention a few. Without these items, the rural lifestyle we see today may not remain. This will eventually cause decline in the rural areas as well. For example, let the schools decline, and the results can be devastating.”
Voges continued, “The county and towns should work together as one community. The county should generate a revenue stream dedicated to enhancing our quality of life as one larger community regardless of address. The towns could use these funds for matching grants, community projects, etc.”
He discussed how the grant process impacts rural Indiana. “We need our small towns. Even though the services can be limited, they still help balance our lifestyles … There needs to be an effort to work together and identify our strengths and weaknesses. The county is in a much better position to help make this happen rather than for individual towns to try to do it on their own. The grant process typically allows these small towns to qualify for basic service and maintenance grants. The grants that can have a big impact on quality of life often require higher match levels and much more work and planning. This dedicated funding mechanism and strategy could allow our community to benefit and grow in the 21st century world.”
Voges concluded, “The current government structure allows the county and towns to operate totally independent of each other. The county does their thing and the towns the same. The current local government system works for most of Indiana. We are not most, we face challenges most do not. The county and our towns working together to make all our lives better could have a very positive impact on everyone’s lives. Especially if there was a funding strategy to make it all happen.”
by Kathy Tretter
Blake Voges dropped by the news office recently. This was prior to the fire that devastated the barn on his family’s property.
In the interest of full disclosure please note Voges is running for Spencer County Council, which is the county’s fiscal body. While commissioners form the executive branch, the council controls the purse strings.
I say in the interest of full disclosure because the Leader generally does not interview candidates this close to the election, but Voges brought up some key points that bear repeating, no matter who is elected on November 3.
“I like to describe our county’s largest fund, the general fund, as a pie,” Voges opined. “The pie represents how much money the county can collect. Every slice of this pie represents each parcel of land in the county. One might think if taxes go up the value of your house increases, or if a big factory comes to town, the county’s pie would grow, resulting in more money for the county — but that’s not how it works. The growth of the pie is regulated by the state annually, typically an increase of 2.4%. For 2020 our pie was $7,075,265. When a large factory or investment comes to town, its value to the general fund is not the tax it pays, but the assessed value it contributes to the county. As assessed value is added to that parcel, or slice of pie, that slice grows, making all the other slices of pie just a little smaller. The pie cannot grow, the state won’t let it. Our tax rate is determined by the size of the pie, divided by the assessed value of all the slices.”
In other words, more assessed value in the county reduces the tax rate, and less assessed value increases the tax rate.
Voges was particularly incensed when, a week before his news office visit, the Spencer County Regional Chamber of Commerce organized a special educational session on Tax Increment Financing (TIF), led by Tom Pitman, an attorney with Barnes and Thornburg in Indianapolis whose practice is concentrated in public finance and municipal law. Pittman has more than 30 years of experience serving as bond counsel, special tax counsel and underwriter’s counsel. His particular area of expertise is TIF. He literally wrote the book on understanding TIF, which is just one of the tools in a tool box, along with the more commonly used (in Spencer County) tax abatements.
Pittman came to Spencer County on his own dime to help elected officials understand all the tools they have available and Voges, who attended so he could understand the complexities, was surprised by the lack of interest from those who are paid to protect Spencer County’s best interests. Not one elected official attended.
Part of what Voges considered a disservice to residents was the dissolution of the TIF District created for AK Steel 10 years before it was set to expire. While this had been a decision of the Redevelopment Commission, had the council wanted to retain the fund for the benefit all Spencer County taxpayers it would still be in place. Currently the steel giant is behind in Spencer County taxes by $3.5 million and the county has been in litigation with AK Steel for several years over its assessed value (among other things).
Here is a simple explanation of how TIF works: Tax increment Financing is a tool used by municipal governments to stimulate economic development in a targeted geographical area. The area is designated and TIFs are used to finance redevelopment projects or other investments using the anticipation of future tax revenue resulting from new development.
When AK Steel decided to build in Spencer County, TIF was used to develop the property, which had originally been slated for residential development but was rezoned industrial. Funds that would have been captured during the final 10 years could have helped with needs such as the broadband initiative. This money could have benefited schools, even pay teacher’s salaries, according to Voges, who expresses frustration the county passed up on potentially $55 million in revenue by ending the AK Steel TIF 10 years early. “It kills me to see all those millions fall through the cracks.” Voges can, in detail explain how the loss impacted Spencer County as a whole, both financially and with an eye toward potential economic development. He is primarily concerned about the future of schools.
“Spencer County’s future is rooted in our schools,” Voges opined. “They are under threat. Enrollment for North Spencer has fallen by 16%. In South Spencer that number is 18%.”
He adds that since Spencer is a rural county with only small towns, a void exists because most counties have at least one larger municipality. These larger municipalities drive commerce and growth across a larger area. Because of this void Spencer County relies on county government more than most. “Counties are not structured the same and municipalities and are not equipped to address the challenges or opportunities of cities and town.”
“This scenario seems to be taking its toll in the 21st century,” Voges noted. “Spencer as a county is doing alright. The rural economy is also doing alright. The same cannot be said for the towns. These old towns have few tools to work with compared to larger municipalities. The potential decline of these small towns could leave the county in a less than desirable situation. The Spencer County rural lifestyle is very desirable for families looking for just that. This lifestyle requires services and amenities not found in the rural county. Schools, food, fuel, entertainment, community activities, and day care to mention a few. Without these items, the rural lifestyle we see today may not remain. This will eventually cause decline in the rural areas as well. For example, let the schools decline, and the results can be devastating.”
Voges continued, “The county and towns should work together as one community. The county should generate a revenue stream dedicated to enhancing our quality of life as one larger community regardless of address. The towns could use these funds for matching grants, community projects, etc.”
He discussed how the grant process impacts rural Indiana. “We need our small towns. Even though the services can be limited, they still help balance our lifestyles … There needs to be an effort to work together and identify our strengths and weaknesses. The county is in a much better position to help make this happen rather than for individual towns to try to do it on their own. The grant process typically allows these small towns to qualify for basic service and maintenance grants. The grants that can have a big impact on quality of life often require higher match levels and much more work and planning. This dedicated funding mechanism and strategy could allow our community to benefit and grow in the 21st century world.”
Voges concluded, “The current government structure allows the county and towns to operate totally independent of each other. The county does their thing and the towns the same. The current local government system works for most of Indiana. We are not most, we face challenges most do not. The county and our towns working together to make all our lives better could have a very positive impact on everyone’s lives. Especially if there was a funding strategy to make it all happen.”
