While Schools Grapple with Closures, Redevelopment Spends Like Drunken Sailors

Hundreds of thousands in change orders have been unanimously approved at the Sportsplex, Kube and Woodmar Demolition projects in the past 6 months.

The demolition of Woodmar and the Hammond Sportsplex seem to have priority property tax funding while our schools struggle to keep the doors open.

November 19, 2019-As the School City of Hammond debates closing two high schools in order to deal with a budget shortfall, the Hammond Redevelopment Commission has approved hundreds of thousands of dollars in change orders over the past several months without any dissent. The majority, if not all, of the change orders were funded with Hammond property tax dollars that would have helped to fund the schools “but for” the underperforming tax increment finance districts. At the Sportsplex, the un-elected Redevelopment Commission approved $300,000 for a lounge. At the Kube, a private development located in Dowling Park, the Redevelopment Commission picked up the tab for the $1.1M parking lot. At the demolition site of the former Carson, Pirie, Scott and Co. the Commissioners approved change order after change order driving the price up month after month.

At a recent meeting, the Redevelopment Commission approved a change order in the amount of $27,500 to install 7 televisions and 2 bathroom lights. Commissioners questioned neither the expense nor why the two bathroom lights were not included in the original plans:

In past discussions, the Mayor and others have stated that TIF money does not affect the schools, we hope to foster a real discussion as to whether, and if so, to what extent, the Mayor’s TIF projects are taking money from the School City of Hammond.

If you have questions or comments regarding tax increment financing we would love to see them in the comments section. We will try to answer all questions with links to real information from the internet.

18 Comments

  1. 5 million to develop land for Potash Corp. 3.5 million to develop land for Walmart. 150,000 to help Smith Chevy with the neighboring land. 4 million for Lear. Raises for the city council. Closed schools.. Closed libraries.. Health department gone.. Recycling department private..Court house gone.. buses? Don’t forget the money being spent on Downtown Hammond “redevelopment”. Or the “back of building peeling off” city Hall. How can the city of Hammond not be able to fund schools, but will have no issue buying and developing Clark? Someone should FOIA how much HUD/blight dollars the city of Hammond has spent in the last 10 years on things not related to public housing .

  2. It’s is also interesting that the president of the school board, Anna Mamala, is also on the redevelopment committee. The city wants the land and she swayed the board to give it to them. Our kids never stood a chance of keeping their schools. Now the city and school board will have to deal with the mass exodus of families from Hammond.

  3. Uh, the civil city has little to nothing to do with funding the school city, right? You do understand the state has everything to do with funding the school city, yes?

    • Yes, but the mayor CAN help out if he chooses. OTOH, HIS school, HAST, is part of the problem, taking money away from the public schools.

    • Right now the school is grappling with a reduction in revenue due to the “fiscal cliff” which is a reduction in local property taxes. The point of this article is to demonstrate that the RDC is taking a larger share of the property taxes AND wasting money in many instances.

  4. Schools =/= City funding. School fundings come from different place than city/town funding. School funding also has different accounts. General cannot pay for extracurricular/sports and vice versa. Learn how school funding happens before writing an article implying Hammond is “squandering” Taxpayer money. Though admittedly what the Redevelopment Commission is doing IS squandering Taxpayer money within the city.

    • AC that simply is not true in the case of property tax revenue. There. Is a school funding formula for the state share, but schools also get property taxes. As far as the different accounts, the legislature combined most accounts last year.

      TIF is property tax which, at least in part, is taken from schools. Schools are funded by a mix of property taxes and state funding. Reducing the amount of property tax that a school gets reduces their funding.

      https://www.doe.in.gov/sites/default/files/legaffairs/hea-1009-guidance.pdf

      The Indiana General Assembly passed legislation that impacts school corporation funds beginning January 1, 2019. The bill eliminates the School General fund and creates an Education fund for expenditures related to student instruction and learning and an Operations Fund to replace the Capital Projects Fund, the Transportation Fund, the Art Association Fund, the Historical Society Fund, the Playground Fund and the Bus Replacement Fund, which are repealed effective January 1, 2019 for the dedicated funds and moves the purpose of such funds to the Operations or Educations fund. The Operations fund will raise a property tax levy to provide funding for aforementioned levies.

  5. If the mayor believed in the Hammond school system and supported the Hammond schools then why did he choose to send his kids to private schools outside of the city of Hammond or the state of Indiana for that matter? He doesn’t care about the School City of Hammond and their teachers and has taken the approach of “it’s not his problem”. It is very disappointing that the mayor cares more about spending money for re-development and has shown little to no support for the schools…Time for a change. Vote this guy out!!!

  6. The implicit theory here seems to be that if the assessed value in these “underperforming” TIF districts were rolled off it would have made or make available more tax assessed value from the real estate outside the TIF. But isnt it the case that school operating funds come from the State? Wasnt that the point of the Red for Ed rally in Indy, to provide more budget dollars from surplus funds hoarded by the GOP and Governor Holcomb?

    • But for the TIF (often with base driven down to zero), the schools would have more money. This is especially true where the development is not being driven by the TIF. Let’s look at Oxbow Landing and Downtown Hammond. Oxbow Landing, no TIF then no new development. Certainly an argument can be Meade there. Downtown Hammond, no TIF very little is different and the schools get more money. Downtown Hammond TIF has hundreds of residences with zero base in the TIF. That means they pay their taxes but the schools do not get one dime even though they send children to the schools. I will post the Downtown Hammond TIF spreadsheet which lays out the residential properties that I downloaded from the Gateway.

      Indiana used to require property taxes to pay for capital and bus accounts while State funds paid for operating expenses. Now it all goes into the same account. Whether operating or capital, Hammond is in dire need of funds in both places.

      • I dont really get your point. Absent TIFs, redevelopment/new development funds are non-existent or insufficient. Still, redevelopment/new development are precisely what TIFs were designed to enable. What TIFs are not designed for or permitted at law to be used as is for “operating funds”. So school operating money cant be a part of same account as capital and bus accounts. Also, isnt the extent of TIFs debts limited to 2% of assessed value? Finally, school districts are separate municipal corporations and especially a city’s independent Redevelopment Corporations. You are confusing matters here. As a WAPO article by Education Activist/Writer Carol Burris observed:

        After his election, Daniels quickly laid the groundwork for creating a system based on the belief that the market principle of competition would improve education outcomes and drive down costs. Under the guise of property tax reform, Daniels seized control of school funding by legislating that the state would pay the largest share of district costs known as the general fund, while giving localities the responsibility for paying for debt service, capital projects, transportation and bus replacement.

        Daniels and the legislature also made sure that districts would be hamstrung in raising their local share by capping property taxes so that they could not exceed 1 percent of a home’s assessed value. The poorer the town, the less money the district could raise.

        This proved to be a one-two punch. Busing was halted in districts that could not afford to transport students or replace buses when they broke down. Millions of dollars in capital improvement funds were lost to poor city districts such as the Muncie Community Schools. The Wayne Township Schools lost 1.7 percent of its budget, forcing the closure of summer schools and in 2008, the Indianapolis Public Schools lost $10.8 million of its $553 million budget.

        It also made districts entirely dependent on the whims of the legislature. General funding would become “an annual unknown” subject to the ups and downs of state income and sales tax revenue. The legislature was in control of how the money is doled out and years of a conservative Republican supermajorities resulted in the proportional amount going to poor districts decreasing, while proportional revenue going to wealthy districts went up.

        I reaffirm the argument and theory of my initial comment in re seeking to have properties rolled-off current TIFs.

    • Hammond will get over $90 million from the Horseshoe next year. The city’s budget is $102 million. Does that sound normal to everyone else? TIF districts are not helping the city at all. Ask Gary. Gary and Hammond have the same amount of TIF districts. They just would the public safety building for like $40 million. The city of Hammond sold about $40 million worth of debt a few years back. That’s why water bills keep going up.

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