For Immediate Release: Friday, November 21, 2014
CONTACT: Jerry W. Derr 605.720.1625
Revised Boundary of the Proposed TIF District
Sturgis, SD - The Meade County commission has revised the boundary of the proposed TIF district it will use to pay for construction of a highway connecting Highways 79 and 34 with the Pleasant Valley Exit on I90. The change will exclude Blucksburg Subdivision and the area near Brown High School and will include a large amount of land along the Butte County border, extending east to the route of the proposed Keystone XL pipeline.
"We realized the pipeline should be in the district because trucks and workers going to the pipeline will be road users, and because the new property tax from the pipeline will help pay the TIF bond off even faster," said Commission Chair Alan Aker. "We're not counting on the pipeline being built to pay off the TIF bond. The TIF boundary encompasses enough other land to pay off the expected road cost well within the 20-year time frame for paying off TIF bonds. But if the pipeline is built, it will pay off even faster."
Aker said the commissioners have had questions on whether any landowners in the TIF district will pay higher property taxes. Businesses within the tax increment district will pay the same taxes they would pay if they were not in the district, except they will not get the 5-year discretionary tax break for new construction which is available on commercial projects over $30,000 in the rest of the county. "For homeowners and ag land, there is no difference at all between the taxes you pay in the TIF district and the taxes you pay outside the district, because the discretionary tax break is not available for those kinds of property" Aker said. "For newly-built ag structures over $30,000, those in the district will not have the 5-year tax break available in the rest of the county," he added.
Aker said the county is not able to take a "wait and see" approach on whether the pipeline will be built. "If we waited until after the pipeline was built, the new tax revenue from it would go mostly to the state, through reduced support of local schools, and would not go to the fund which will pay off the TIF bond," Aker said. "One of the big benefits of building the road with the TIF district is that the state winds up paying for about two-thirds of the road, through the hold-harmless provision in the school aid formula," he added.
The Meade County planning commission will hold a public hearing Monday, November 24 at 9 a.m. in the Erskine Building in Sturgis to take public comments and make recommendations to the county commission on the TIF district boundary. The county commission will then discuss, and may finalize, the boundary at its December 10 regular meeting. The planning commission is an advisory body, and the final decision on TIF district boundary belongs to the county commission.
"We're in the public-input phase of this process," Aker said. "We want to hear from the public on the proposed boundary, and you may see other changes to it as we respond to public input."
For any questions, please call Chairman Alan Aker at 605.390.6515