Two of the largest taxing jurisdictions within the city of Joplin's disaster recovery tax increment financing district could return an estimated $2.8 million to their coffers when the district is closed out this year.
Joplin Schools will get the most back — about $1.5 million in annual property tax revenue, according to the district's assistant superintendent of business, Ron Lankford.
The city itself will benefit with an infusion of nearly $1.3 million a year for its general fund as well as money for its public safety, parks and stormwater, transportation, and capital improvements projects, according to city finance department figures.
What will enable the dismantling of the district is the payoff April 1 of city debt secured by the TIF district. The City Council is expected to act soon after that to order the district dissolved.
That debt financed land for redevelopment projects to jump-start commercial rebuilding along the 6-mile stretch of tornado destruction that wiped away many buildings and houses in 2011 in south-central Joplin.
Bonds in the amount of $18.25 million were issued to buy land that was resold to developers for such projects as senior and low-income housing and future retail locations for a Braum's restaurant and an Aldi supermarket. That work is being done by a city commission, the Joplin Redevelopment Corporation, that still owns about $6 million worth of land available for resale.
Bonds of $5 million also were issued to pay for the city's share of the cost to build the new Joplin Public Library at 20th Street and Connecticut Avenue.
Interest paid on the bonds amounted to approximately $2 million.
It was the largest TIF district ever created in Missouri when it was approved in 2012, taking in the tornado zone and downtown — about 3,100 acres. The purpose was to collect tax revenue to secure the issue of bonds for the tornado redevelopment projects.
Although TIF districts can be granted for up to 23 years under state law, this one will be out of business after less than eight years. That is because business and housing sprang back in the tornado-ravaged zone more quickly than expected, bringing in much more in sales tax, property tax and franchise tax proceeds than had been expected, said Leslie Haase, the city's finance director.
"Back when the TIF was passed, they (the district planners) did a best-case scenario, a mid-case and a worst-case scenario and we tracked all of that every year. Essentially, the collections exceeded the best-case scenario," Haase said.
She announced at a City Council meeting last Tuesday that the bonds would be paid off even earlier than she had predicted last year — by April rather than October — because of the tax revenue growth.
Benefit to school district
Lankford, with Joplin Schools, said that regaining that tax money that had been diverted for recovery purposes is coming at a crucial time.
"They let us know last year that tax collections of 2019 would enable them in 2020 to pay those off those bonds," Lankford said. Because of that, the district was able to plug tax proceeds for more than $50 million of assessed valuation back into its budgets.
"Having that information was very helpful when the bond issue came up," he said, referring to a $25 million bond issue that will be on the April 7 ballot to build a new school atop Dover Hill to replace Columbia and West Central schools. "We will be getting an extra $300,000 to $400,000 in revenue for the district's debt service fund that helps us with the debt levy" if voters approve the proposal.
The school district has maintained a debt service levy of 91 cents per $100 of assessed property value since 2013. The added revenue was one factor in allowing the district to propose a seven-year extension of that levy from 2033 to 2040 without a tax increase, Lankford said.
"And the remainder of that money will help us fund school operations," putting somewhere around $1.1 million into the operating fund, he said.
"It also was good news because, with the school funding formula, we will see no increase in revenue from the state" for the next two years, Lankford said. "So it really helps the school district to plan for this year and next year" by helping to supplant the budget.
Joplin has experienced a series of tight budgets that city officials have said will be eased by voter passage of Proposition B, a half-cent sales tax to fund the police and fire pension. That will free up general fund money that had been spent on the pension for other city expenses, along with the revenue coming back from the TIF district.
The general fund should see about $600,000 more a year. The half-cent tax funds for public safety and transportation are expected to gain about $213,000; parks and stormwater, $112,000; and capital improvements about $157,000 a year, Haase said.