TIF IS A GAME CHANGER

Corporate investment in TIF means community control of resources

Tax Increment Financing was introduced by the State Legislature in the early 1990s as a way for growing townships to encourage economic development and extend local control of revenues that could be reinvested locally.

The statutes governing how TIF is to be implemented have changed slightly over the years, but the basic premise has remained the same. Within set geographic areas, new commercial investment can be assessed a PILOT (payment in lieu of taxes) that can be retained by the local community for capital improvements to that same geography. The PILOT is based solely on the new value (not the existing value of the property).

The money collected as part of the TIF can be used for public infrastructure (buildings, equipment, roads, etc.) with a life of at least 5 years and for private infrastructure development that inspires further economic investment.

Since the construction of the Union Centre Boulevard interchange, West Chester has endeavored to deploy TIF resources in a balanced way benefitting the overall community interest and the pursuit of continued private corporate investment.

“TIF is sometimes viewed unfavorably by residents, but these resources which come from the private sector have allowed West Chester to develop parks, build a library, purchase fire apparatus, and build fire stations without burden to residential property owners,” said West Chester Township Administrator Larry D. Burks. “The Township also steers TIF funding to projects which might be viewed as having more benefit to business than residential tax payers – such as roads, utilities, and the DDI.”

West Chester annually sets aside TIF funds for paving Butler County roads in the districts, as well as funding for defined projects such as the Union Centre DDI and landscape, The Square, and firetrucks. The DDI configuration has increased safety at the interchange since it opened and increases capacity to handle vehicles. The DDI landscape project, still underway, helps define the community to those using the interchange making it marketable and welcoming.

TIF funded the recent construction of the $3.8 million Fire Station 73 on Duff Road.

West Chester Township has eight TIF Districts and collects $15 –

Carryovers Support Positive Budget Planning

Cash carryovers have always played an important role in West Chester Township’s financial success. Budgeting to need, rather than available resources, has kept West Chester financially sound throughout bleak economic times of recession and play a vital role in extending expected lifespans of public safety levies and West Chester’s enviable Aaa bond rating.

Carryovers in the Township’s most critical primary funds – Police, Fire, Roads and General - give confidence in times like 2020 when revenue collections and other revenue sources might have experienced decreases; as well as during the Great Recession.

“Saving money and having cash on hand demonstrates fiscal constraint and responsible stewardship of taxpayer resources,” said Finance Director Ken Keim. “If the Township found itself in financial

$20 million total into these districts annually. Some districts collect more than others with UCB being the most lucrative. Some districts are obligated to specific projects such as the Liberty Way interchange.

The Lakota Local Schools receive annual payments of approximately $5 million from West Chester TIFs.

“It’s all about working to build a well-rounded community for our residents and businesses,” Mr. Burks said. “It can be challenging to identify the right projects that add to the overall community interest, can be sustainable into the future and don’t create added burden for the future.”

While TIF can be used to build things, it can’t be used to pay people to manage them. Adding park spaces, for example, has to be well thought out because with a new park comes new maintenance responsibilities. If park size and amenities are considered and kept in line with what can be managed with existing staff, the project is sustainable.

The Midpointe Library is another example. TIF funds were used to construct the library, but the Midpointe Library System takes all responsibility for operating, managing and maintaining the facility. It becomes an amenity that did not require our township government to grow.

MidPointe Library

crisis, there would still be some breathing room before services were cut or taxpayers were asked to pay more.”

West Chester sets carryover goals in each of the primary funds. These goals give some confidence in funding for the next year’s payroll especially in the levy supported public safety funds.

West Chester entered 2021 with carryovers in each of its primary funds: General Fund - $9.9 million; Roads Funds$2.9 million; Police Fund - $12.9 million; Fire & EMS Funds - $13.4 million.

The books aren’t yet closed on 2021, but new carryover figures will be available as part of the 2022 Operational Budget Work Session.