The City of Salem is looking at a 12-year extension of the downtown tax increment financing district.
Economic Development Director Leah Dellicarpini says she and new City Manager Lisa Peck agreed that if the recent downtown building renovation is going to continue, TIF will have to remain as a financing tool.
The taxing bodies in the downtown TIF are being asked to approve the extension of the downtown TIF as part of an agreement to receive surplus money from property tax growth on some properties within the new TIF-4.
Dellicarpini says she came up with the idea of combining the two TIF project agreements to avoid having to go to each taxing body in the downtown TIF for their approval of the extension next year. While a taxing body can stop a 12-year extension of a TIF district, the city council can approve a new TIF district on its own following the public hearing process.
Salem Community High School Superintendent Dr. Brad Detering, when addressing the council at last Monday’s meeting, felt the two should be separate issues.
“I went through this whole process,” Detering said. “TIF-3 was never mentioned until we got a document the day after the public hearing, saying the only way in which this surplusing of property works is if the TIF-3 extension is approved for another twelve years. We have not even discussed that. I’ve been trying to keep my board apprised of things going on in TIF-4, and never once did I let them know anything was related to TIF-3. That’s a little bit of a concern. It seems like that’s being leveraged a little bit. It just seems to me like those should be separate issues. We should work on TIF-4, and when TIF-3 comes up in the fall of 2026, we can start taking a look at that as well.”
Detering is also concerned about a three percent yearly cap that is now included on any increased valuation from surplus property. The superintendent fears that such a large TIF District capturing new property tax revenue could reduce revenue enough to end up raising property tax rates for some taxing bodies.
Detering says that since the agreements were not in place at the time of the public hearing on the creation of the new TIF-4 District, no public discussion has been held.
The city council will be asked to approve the new TIF-4 zone at its meeting next Monday.
