Facing added expenses with a new elementary school and declining state aid, the Pleasant Valley School Board has told LeClaire officials it is "fully opposed" to expanding a Tax Increment Financing (TIF) area in the city.
"While the current proposed TIF expansion in LeClaire does not extend a TIF expiration date, it is the district's understanding that it does add approximately $750,000 of valuation to a TIF area," the district wrote in a statement to the city of LeClaire.
"In the district's view, this shows significant disregard for the concerns that the district has articulated to the city and therefore, the district has taken the position that it is fully opposed to the city's current TIF proposal," the district wrote the city.
The city has scheduled a public hearing Sept. 7 on the TIF area expansion plan. Under the current state law, a city has sole authority in establishing a TIF district even though the school, county and other taxing bodies are impacted.
According to the public notice, the areas which would be added are:
Under a TIF district, property taxes within the area are retained either by the city for improvements to that specific area or returned to the developers as an incentive for building the project. TIF revenues not only include city taxes, but those taxes normally paid to the school district and county.
In the LeClaire taxing area, about half of TIF funds to be rebated in the development would be school taxes. Based on the school district's tax rate of $14.74 per $1,000 assessed valuation, the $750,000 commercial property value lost to the TIF would mean an annual loss of $11,000 in school tax revenue. The county's tax loss would be about $4,800 annually. The city's taxes on a commercial property assessed at $750,000 would be about $12,000.
"The district has historically supported LeClaire's use of TIF, but over the last several years, the district has become increasingly disenchanted with the city TIF policy," the school board noted. "The district's main concern is with LeClaire's practice of extending TIF's for an unreasonable time, which does not allow those valuations to return to being regular (non-TIF) taxable valuations."
The district's position and letter to the city was passed on a unanimous vote of school board members at its August meeting.
LeClaire has used TIF areas for residential development, unlike Bettendorf and Davenport which have used the TIF incentives only for commercial and industrial development. In Bettendorf, such TIF incentives have usually been for 11 years or less.
