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In Johnson County, Some Are Asking 'What's The Matter With TIF?'

Sam Zeff

For decades, cities in Johnson County have quietly used tax increment financing  — or TIF — to lure development.

And for decades, politically, that’s not been questioned.

But TIFs, it turns out, are becoming more contentious in Johnson County, especially in the Shawnee Mission School District. 

"... That dialog has entirely changed recently, in the last year and a half or so, as a result of the preponderance of TIFs,"  says Jim Hinson, the district's superintendent.

Hinson is worried about TIFs for a couple of reasons.

First, TIFs take tax money that would go to school districts, cities, fire districts or the county and funnel it to developers to help pay for projects. The hope, indeed the reality in most cases, is the development makes the property worth more, thus spinning off more property taxes.

Credit SMSD
Shawnee Mission School District Superintendent Jim Hinson is making the district a surprising new player in TIF development.

But TIFs can suck up that added tax money for a long time, up to 20 years, so the district loses funds at a time when it is growing.

"But it puts us in a quandary right now because we’re going to need construct additional facilities in the future. But when everything is TIFed that’s being proposed, it puts us in a very precarious situation as a school district," Hinson says.

So now Hinson and the Shawnee Mission School Board have become a surprising TIF player in Johnson County. It turns out that when the Legislature passed the TIF law in the 1970s it gave school districts and county commissions the power to veto a project early in the process, no explanation needed.

Right now, county data show, there are 37 TIF developments in the county. Those projects, according to county records, divert about $2.8 million dollars a year from the county and a little more than $7.2 million from Shawnee Mission and Olathe schools.

While the rest of the county commission seems fine with TIF, Commissioner Michael Ashcraft says he is worried: "I have to scratch my head and think, is this really the best way to do it and who represents the interest of the county and the school districts when those decisions are made."

To be sure, TIFs have done a lot of good.

One shining example is Merriam Town Center at Antioch and Johnson Drive.

"If you talk to previously, and certainly a majority of current county commissioners, I think they would feel that the TIF districts have been tremendously beneficial to enhancing the quality of life and increasing economic benefit for the entire community and countywide, yes," says Johnson County Manager Hannes Zacharias.

In the next few months the Merriam Town Center's TIF benefit will end and the county will get more than ten times the tax money than before the development. The school district will do just as well.

So if TIFs have been around since the 70s, and no Johnson County school board or county commission has ever vetoed a project, what’s changed?

The answer: the Kansas Legislature.

"We’re just in an environment of scarcity where we’re all fighting for dollars that really can’t be stretched to go around," says state Rep. Melissa Rooker, a moderate Republican from Fairway, who says uncertainly about school funding and revenue, are driving this new TIF rumble.

Credit Sam Zeff / KCUR
Johnson County has never vetoed a TIF project although one commissioner wants to start taking a closer look at development projects.

"I am very concerned and I can understand why the school districts and the counties are also concerned when TIFs come up," she says.

The county also is losing other funds. Two years ago the Legislature decided to phase out the fee for mortgage registration, which will eventually cost Johnson County more than $10 million a year in revenue.

Commissioner Ashcraft says it’s time for TIF decisions to be more inclusive. "But the county, I believe, and the school district, probably, should have a voice in those decisions because it impacts us."

Inclusiveness is probably where TIF is headed in Johnson County.

Shawnee Mission Superintendent Hinson says his staff regularly meets with Overland Park city staff to talk about potential TIF developments, like the future of 95th and Metcalf.

In the meantime, the Shawnee Mission School Board is developing guidelines to help it decide when to use its TIF veto power.

Sam Zeff covers education for KCUR. He's also co-host of KCUR's political podcast Statehouse Blend. Follow him on Twitter @samzeff.

You deserve to know what your taxpayer dollars are paying for and what public officials are doing on your behalf – I’ll work to report on irresponsible government spending in the Kansas City area and shed light on controversies that slow government down. And when you hear my voice in the morning, you know you’re getting everything you need to start your day. Email me at sam@kcur.org, find me on Twitter @samzeff or call me at 816-235-5004.
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