EDUCATION WATCH BLOG
Feb. 9, 2015
A newly proposed downtown tax incentive district could force the Oklahoma City Public Schools district to find funding to build a new school.
Bart Binning, a real estate broker invited to the board’s special meeting Tuesday, said one of two proposed tax increment financing districts would spark residential growth in the area south of downtown. He added a new school would be needed to accommodate the growth.
The district does have leverage to negotiate with the city to ensure money for any new school is provided by the the taxing district, Binning said.
“If you don’t have a school down there, it’s going to stifle development,” he said. “You’ve got arguments for doing this thing.”
Binning was invited to the meeting to help the board understand how TIFs work. The invitation came after the city council voted on Jan. 27 to create a committee to look at the creation of new taxing districts that would be in downtown.
Binning said TIFs freeze property tax assessments for about 25 years in Oklahoma City. Any increase in property taxes is diverted to pay off bonds used to fund infrastructure development in the TIF district.
That means government agencies relying on property taxes lose any tax growth until the TIF expires. That could pose challenges when trying to build a new school, Binning said.
He added TIFs can be good in the long term because they encourage development in areas that are usually ignored.
He highlighted the region south of Oklahoma City as one of those areas because it has industrial pollution that makes private development financially impractical without public support.
“TIFs are great for economic development,” he said. “But any government organizations that rely on property taxes need to be concerned about how it will impact them.”
While board members asked questions, none voiced an opinion on whether they support the proposal.
Board member Bob Hammack said that while the school district may not have a vote, it does have the ability to influence public support for or against the TIF proposal.
TIFs may benefit the greater good of Oklahoma City in terms of economic development, but the school board has to make sure it looks out for the best interest of students, Hammack said.
“We have a bully pulpit,” he said.
School board President Lynne Hardin said the district does want to work with the city.
“We want to cooperate with everyone,” she said. “This can really benefit everyone, and this can help us long term.”