A new idea is on the table for a review committee analyzing options on a Tax Increment Financing District for west Lawton industrial sites.
Monday, committee member and Cache Public Schools Superintendent Chad Hance suggested a project plan that would allow school districts to be “held harmless,” meaning they would not feel the effect when new revenue gained from ad valorem growth is designated to infrastructure, jobs training and incentives that benefit new and existing industries. A previous suggestion would designate 25 percent of the new growth revenues to all taxing entities, including school districts.
The proposal comes as the Skills Training, Education, Development and Investment Project Plan Review Committee held its third meeting on a concept that would place west Lawton industrial sites and the Airport Industrial Park into a project plan that designates up to 13 Tax Increment Financing (TIF) districts among the 1,430 acres of land contained within the two broad areas.
The idea for a TIF came after Republic Paperboard, a west Lawton industrial park tenant, asked the City of Lawton about using the concept to help in its $94 million modernization plan. As crafted under state law, such districts use the growth in ad valorem and sales tax revenue that results from new/expanded industries to help pay for infrastructure needed to support that growth, as well as jobs training and incentives. Republic Paperboard has said its modernization would create 20 new high-tech jobs.
The 10-member review committee is comprised of representatives of every taxing entity that would receive ad valorem revenue from the lands being considered for a TIF. Most west industrial land is within the Cache Public Schools District, and Hance said that means his district stands to lose out on the growth in ad valorem revenues (existing ad valorem revenue would remain unchanged, under a “baseline” assessment made before the Republic TIF is put into place).
Initially, the proposed project plan specified all new growth would be placed in an apportionment fund controlled by the City of Lawton, with those funds restricted to TIF-approved expenditures. Dan Batchelor, the Center for Economic Development Law attorney who has been helping Lawton guide the process, said the first $30 million of revenue growth would be dedicated to the critical infrastructure identified for what is designated as area three in the TIF plan. Once that $30 million level had been reached, entities — to include school districts — would be “held harmless” and get their entire entitlement.
A revised proposal outlined earlier this month would change that apportionment, designating 25 percent of the new revenue growth to the taxing entities, 10 percent for STEM training/classes, and reserving 75 percent for the apportionment fund until the $30 million infrastructure milestone is reached. Batchelor noted that sinking funds (debts paid through ad valorem) would be held harmless, meaning each taxing entity would receive what it needed to pay debt before the TIF was figured).
Those were the plans Batchelor analyzed for the review committee as it met Monday in an effort to reach consensus on the plan that would be submitted to the council.
But during discussions, Hance noted the volatile nature of state funding to school districts, saying it has fluctuated wildly during the last decade as state revenues decreased and increased in cycles. He said that was the reason for his proposal: school districts in these TIF districts be held harmless, allowing them to receive their full benefit of ad valorem growth.
Hance said the net effect for Cache Public Schools would be only $861,000 over 25 years, the projected value of ad valorem taxes for the $14.8 million Republic TIF proposal. Batchelor said that is what would happen after the $30 million is generated for infrastructure, but Hance said schools should receive that funding now, noting the total amount taken from the TIF equates to only $30,000 to $35,000 a year for Cache from this first TIF.
“Schools should be able to capture that,” Hance said, adding patrons also would like the idea. “If I was held harmless, I could come to this a little better.
“We’re giving up bonding capacity.”
Review committee member Ron Nance (one of three appointees who represent the community at large) said that without the TIF District, there would be no additional funding because there will be no growth. Giving up that ad valorem allows the TIF to pay for the infrastructure that will benefit existing industries and new ones, as well as taxing entities.
Hance said Republic already has started expanding without the TIF — there is a new warehouse visible at the plant. Nance countered that Republic is moving forward based on the community’s commitment.
“We need to finalize our commitment to do the TIF,” Nance said.
Western District Commission Alvin Cargill, the Comanche County representative who suggested the 25/75 percent split plan, said Hance’s idea would prove the committee’s commitment to industrial growth while showing new industry that education is important.
“It’s only $861,000 over 25 years,” Hance said.
Commissioners didn’t indicate their vote on an ultimate plan. Mayor Stan Booker, the City of Lawton representative who chairs the review committee, said that vote is expected to come at a Nov. 25 meeting.