Although Marion County, the City of Hillsboro, and USD 410 will not receive additional property taxes from Midway Motors’ move to U.S. 56 because of a tax increment financing district, increased sales tax revenue will likely make up for most of that amount, Hillsboro City Administrator Larry Paine told county commissioners Monday.
Similar relocations by car dealers elsewhere have increased sales — and sales tax revenue — by about 20 percent, Paine said.
According to the city’s calculations, the county will miss out on about $12,000 annually of property tax that will be redirected to pay bonds for infrastructure improvements in Hillsboro Business Park. If sales increase as much as anticipated, the increased sales tax revenue will fill most of that gap, Paine said.
Property taxes will be redirected to the TIF district for a maximum of 20 years.
The cost of improvements that allowed Midway Motors to begin construction was about $400,000. Without TIF, the city would have had to pass that cost on to taxpayers or the company, he said. If the cost went to Midway Motors, the company might not have decided to move. In 2008, when the district was created, the automotive industry was in trouble, and the extra investment may have prevented development.
Paine said he took issue with one commissioner calling Midway Motors and giving the owner the impression that the city was taking advantage of them.
Commissioner Dan Holub said he made the call and that Paine mischaracterized the conversation. He called when he heard the company had withdrawn from the county neighborhood revitalization program — the TIF district is mutually exclusive with neighborhood revitalization. Holub said neighborhood revitalization would rebate about $150,000 over 10 years to the company. He offered to put Midway Motors’ withdrawal from the program on hold while the company considered its options.
Hillsboro Development Corporation Executive Director Clint Seibel urged commissioners to consider the big picture — while taxes from Midway Motors will be redirected, other projects are joining the tax rolls. Hillsboro Community Hospital broke ground on a new location Tuesday, and Countryside Feeds is fully on the tax roll after receiving 10 years of abatements.
Holub asked why all the issues around TIF weren’t discussed in 2008 before the district was created. Public notice was sent to the county and school district, Paine noted, and neither entity went to the public hearing then.
“Apparently we were asleep at the wheel,” Holub said.
In other business:
- State Rep. J. Robert Brookens and State Senator-elect Jeff Longbine discussed issues related to the Keystone pipeline and a property tax exemption. Longbine said the county’s best chance of preventing the exception from taking effect is the court of tax appeals. Repealing the legislation that allows it would send the wrong message about economic development, he said.
- Canada Bait and Tackle applied for a cereal malt beverage license. Gale Township Board will have a chance to comment on the renewal before the commission votes.
- Marion Country Club renewed its Class B club license.
- Communications Department will advertise a job opening.
- County Appraiser Cindy Magill met with commissioners in closed session for 25 minutes to discuss personnel. No action was taken on return to open session.
- Reclassification of land from agricultural to “other” may become an issue in the county, Magill said. Appraisers are required to classify land on its predominant use, so farmland that is used primarily for hunting would be reclassified. The “other” classification carries a higher assessed value, and correspondingly higher property taxes.
- A county recycling program has recycled about 75 tons of waste in 2010, Transfer Station Director Rollin Schmidt told commissioners.
- Schmidt budgeted $5,000 to be transferred to the capital outlay fund, but he requested to transfer $10,000.
- Road and Bridge Superintendent Jim Herzet requested leasing two tractors from Case International. The company is trying to improve its visibility by leasing tractors to government entities for $1 per year, up to 250 hours of use. Commissioners took no action.
- Deputy County Clerk Tina Spencer, filling in for County Clerk Carol Maggard, met with commissioners in closed session for five minutes to discuss personnel. No action was taken on return to open session.
Commissioners will meet with Goessel City Council at 8 p.m. Thursday in Goessel to discuss county roads near the city. The next regular commission meeting will be Monday.