The Union County Board of Health’s most recent meeting focused on how tax incentives affect the health department, although they refrained from taking an official stance on the matter.
“Our board has never taken a stance on TIFs,” Health Commissioner Jason Orcena said. “It doesn’t mean we’re not impacted by TIFs.”
Orcena shared a presentation with the board during its regular meeting Wednesday detailing Tax Increment Financing (TIF) agreements and how they relate to public health operations in Union County.
The conversation was sparked, he said, by recent media coverage of area TIFs and Marysville City Council’s consideration of extending the Coleman’s Crossing TIF an additional 30 years.
Orcena said TIFs are “really just a way to finance infrastructure development.”
When a TIF district is established, the property taxes assessed from the increased property value are diverted from the entities that would generally collect that money to a specific fund that is used for improvements in that area.
For instance, a TIF could be approved in an undeveloped area for which the Union County Health Department currently collects $25 in property taxes annually.
Once the property is developed and its value increases, UCHD would collect $50 in tax revenue. However, the additional $25 is diverted to the TIF fund and the health department continues to collect only $25, no matter how much the property value and accordant taxes grow.
At the end of the life of the TIF – which are often 30 years in Marysville – UCHD would collect the full $50.
Orcena said TIFs can be beneficial in that they allow municipalities or townships to finance large infrastructure projects.
However, he said an “unintended consequence” can be that TIFs capture the future tax revenue of certain agencies without seeking their input.
While schools must approve TIFs over a certain threshold, other agencies like libraries, health departments and the board of development disabilities, does not vote on the matter regardless of the TIF’s size.
“We’re directly impacted by a TIF but we have no say in that matter,” Orcena explained.
He emphasized that, while the health department does not officially vote on TIFs, that is not to say that City of Marysville officials have not sought UCHD’s opinion on certain TIFs.
Orcena said the health department has never taken a public stance on a TIF, in part because they do not vote on them regardless.
He emphasized that Wednesday’s meeting was “not meant to be a commentary for council” but he wanted Board of Health members to be aware of how TIFs operate because they are being talked about more frequently.
He explained that “commercial TIFs generally have less direct impact” on the health department in comparison to residential TIFs.
Most of UCHD’s interactions with businesses are fee-based, such as providing food inspections and licenses. Still, he said the health department’s food program only collects 80% in fees of what it costs to run the program as required by the state.
So, commercial TIFs that result in the addition of restaurants or grocery stores – like within the Coleman’s Crossing area – do have a financial impact on the health department.
Orcena said residential TIFs are more impactful, although they are harder to quantify.
Creating residential units and increasing the population equals more services provided by the health department that do not have fees associated with them.
The health commissioner said UCHD has already had to increase its infrastructure to support the growing demands in the community.
He said it is very common among health departments that serve communities with a population between 50,000 and 100,000 to be in a “constant juggle” between providing the services necessary with the budget available.
Board member Donna Burke said the impact of TIFs appears to be becoming more complicated because many developments in TIF districts are multi-use mixes of residential and commercial properties.
Orcena agreed, noting that the redevelopment of the Marysville Plaza, where the former Kroger building is located, is “very promising” for the community. Plans for the property include commercial outlots but Orcena emphasized that it is “mostly residential.”
While the impact may be stronger for residential TIFs, Orcena said any development doesn’t pay for the increased services it creates for the health department until the TIF ends.
Orcena said the 30-year Coleman’s Crossing TIF was approved in 2007, meaning the agreement has 14 years left. Marysville City Council is considering extending it an additional 30 years so it would run through 2037.
Orcena said Union County Treasurer Andrew Smarra, who spoke at the most recent council meeting in opposition of the extension, noted that the city is primarily funded by income taxes but TIFs allow it to divert property taxes from the agencies that are “traditionally property tax-funded.”
Board member Gary Bowman agreed, adding that “it kind of rubs you the wrong way, put it on as a school levy and find out it’s going somewhere else.”
Bowman asked if it would help the health department to seek funding through income tax levies rather than property tax.
Orcena said it’s a great question that the health department has considered in the past but has not tried.