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Council voices support for tax plan after forum
Vote on TIF set for Thursday; about 50 attend public hearing
Friday, August 18, 2006
By JOHN PECK
Times Staff Writer
[email protected]
The Huntsville City Council on Thursday night unanimously backed Mayor Loretta Spencer's proposed special tax district for schools and several downtown public facilities.
The council will vote on the issue at its regular meeting Thursday.
A straw poll of council support came at the end of a public hearing on the latest Tax Increment Financing, or TIF, plan. About 50 people attended, many of them city school board members and city department heads.
The TIF also must be approved by the Madison County Commission, which seems more divided on the issue.
Speakers at the public hearing mostly approved the plan, saying the enhancements would help revitalize downtown and stabilize older neighborhoods. Opponents decried spending money on school buildings rather than programs and questioned some of the proposed recipients such as the Huntsville Museum of Art.
The $35 million TIF plan would help pay for a rebuilt Lee High School, a downtown parking garage on Green Street across from the former Times building and a new collector road over Chapman Mountain. It also would funnel millions of dollars for renovations to Butler High School, the Von Braun Center, the County Courthouse, the old Councill School and other public facility improvements.
'We're proud of our TIFs'
Spencer said the broad council support and the low turnout at Thursday night's hearing signals the public realizes the TIFs are working. Previous TIFs helped pay for the new Providence and Columbia schools in west Huntsville, the rebuilt Huntsville High School, repairs to several northwest schools, and other city infrastructure improvements designed to induce development.
"We're proud of our other four TIFs. They do bring in new growth in retail, residential and commercial," she said.
A TIF is a defined boundary that targets blighted or undeveloped areas for improvements. The city borrows money within the TIF for infrastructure investments such as a new school, road or public facility within the TIF. As property values rise within the TIF boundary, the increased property-tax revenue is used to repay the construction debt over the next 30 years.
For the TIF to pass, the City Council, County Commission and city school board must agree to forfeit any growth in property-tax revenue from the defined TIF. Each would continue to collect the same dollar amount it receives today while the growth is redirected to pay back the debt.
City Planning Director Dallas Fanning said the latest TIF has a school component like all the others but also puts a strong emphasis on public facilities such as the parking garage, VBC and the new collector road over Chapman Mountain.
"This is as much about neighborhood revitalization and stabilization and rebirth of neighborhoods, especially in the Lee High area, as well as inducing development along U.S. 72 and, to a lesser degree, the Winchester Road corridor," he said.
Dick Hiatt with the Northeast Huntsville Civic Association said the investments will help neighborhoods.
"This is a wonderful way to go," he said.
'Back door' tax hike?
The proposal had its critics. Ralph Timberlake called it a "sham," saying citizens could see a "back door" property-tax increase without an actual increase in the tax rate. Timberlake urged public officials to find the money through savings. Jackie Reed pressed officials to force developers to help pay for public schools.
Bill Cox said the TIF investments in fringe areas such as the Providence and Columbia school projects in far west Huntsville upset the demographic balance of neighborhoods.
"The city went to the trouble of building these shiny-dime schools for outlying districts and ignored the older areas of the city," he said.
Walker McGinnis, a city school board candidate, said he supports the TIF but wants assurance from the school board that it would make much-needed repairs to several southeast Huntsville schools. The TIF includes language forcing the city school board to commit $10 million from its non-TIF capital money for schools in southeast Huntsville.
Resident Jerry Cox pressed officials on whether property-tax gains forfeited by the TIF would hurt other property-tax-funded city services. Fanning noted that one TIF has already been paid off and that others are on track to be paid off early. The TIF-dedicated revenue returns to the overall city coffers once the TIF debt is retired.
Records show that $83.4 million has been borrowed so far in previous TIFs. City Finance Director Randy Taylor said about $11 million of the city's $188 million operating budget comes from property taxes. The city's capital improvement plan is fed by $11 million in property taxes and $27 million in sales taxes.
County Commissioner Mo Brooks said commissioners need more details. Brooks said the county would surrender $8.5 million in county property-tax revenue from the proposed TIF and get only $2 million for courthouse renovations. He also complained that southeast Huntsville should get more from the TIFs.