The Joplin Globe, Joplin, MO

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November 7, 2012

School officials reserving judgment on TIF proposal pending study, negotiation

JOPLIN, Mo. — Officials with the Joplin School District say they are working with city officials and Wallace Bajjali Development Partners, the city’s master developer, to address potential concerns about a proposed tax increment financing district.

“We don’t see a problem; we see some points the board needs to be aware of and some issues we need to work through, and we’re confident we can work with the developer and the city,” said Paul Barr, chief financial officer for the school district. “The school district wants to be part of a TIF redevelopment that is fair and financially responsible to all taxing districts in the area.”

A TIF district allows cities to repay certain costs developers incur from the increase in taxes their developments generate. The school district is the largest taxing entity within the proposed district, which encompasses most of the zone affected by the May 2011 tornado, and it would provide the majority of revenue received by the TIF district from increases in real estate property taxes.

One potential concern for school officials is that the district’s assessed value — which determines how much revenue it gets from property taxes — could be frozen by the TIF proposal at a level lower than it was before the tornado, Barr said. The district’s real estate assessed value is currently about $34 million less than it was before the tornado, which amounts to an annual difference of $1.244 million in revenue that the district already isn’t receiving, he said.

Barr said the school district’s short-term plan after the tornado was to rely on its fund balances to absorb those losses, with the expectation that redevelopment in Joplin would eventually spur an increase in assessed value to pre-tornado levels. The TIF plan could keep assessed value within the tax district at its post-tornado level for the duration of the project, which is a maximum of 23 years, he said.

“We can’t exist 23 years on a lowered assessed valuation,” Barr said. “We need what we had before.”

A second potential concern, Barr said, is the possible growth in enrollment from new students moving into housing developments that are expected to be built in the TIF district. That growth would come without an accompanying increase in tax revenue from within the TIF area for the 23 years, he said.

“We very likely will have a significant increase in student enrollment, and we will need to meet those needs (and) educate that additional enrollment with building space and additional operating expenditures,” he said.

Superintendent C.J. Huff said during a Board of Education meeting late last month that he anticipates working with city officials to iron out those issues ahead of the Nov. 30 public hearing on the proposed tax district.

“This is a long-term commitment; 23 years is a long time,” he said. “We will be making important decisions that are going to have to be vetted. The city has seemed to want to work with us to make sure our needs are met.”

The school board will have final authority in voicing support of or opposition to the TIF plan, board President Randy Steele said. Its stance will determine how Barr and Huff — the school district’s two representatives to the 11-member TIF Commission — will vote on the proposal.

Steele said he understands what the TIF district would do for the city, but he said he would withhold further comment until he had a better understanding of the plan’s impact on the school district.

“We want to see Joplin rebuild as well, but we have to remind ourselves that we have to look long term,” he said. “I have not seen all the details. It’s kind of hard for us to say (at this point) we approve it or support it. For the most part, I want to see the details to see where we’re at and see how Paul and Dr. Huff feel for us to move forward.”

Previous stances

THE SCHOOL DISTRICT previously supported the TIF district that created the North Park Crossing shopping area. It did not support the TIF district that created 1717 Marketplace, which includes Academy Sports & Outdoors, because it did not agree with the logic that the area was “blighted,” which is a prerequisite for creating a TIF district, according to Paul Barr, chief financial officer of the Joplin School District.

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