Analyzing TIF ruling

Dear Editor,

TIF is short for Tax Increment Financing. First, a city creates a TIF area. From that day on, the county, city and the school district (taxing authorities) agree any tax revenue generated from the appreciation of property in that area will not go to the taxing authorities, but instead will be invested in the TIF area within restrictions under the law. The aim is to revitalize that area of the city with an injection of investment funded by that TIF revenue.

The county and school district had two main complaints in their lawsuit against the Clemson TIF.

Under the law, the investment must be limited in size and scope, and a cost estimate of those redevelopment projects must be made known and adhered to. The cost estimate of the projects in the TIF was $10.4 million. By law, the TIF spending must be limited to that $10.4 million figure. Anything above that figure is considered surplus and must be given back to the taxing authorities annually.

The Clemson TIF is generating about $21 million in revenue over its life, and instead of returning the amount above the $10.4 million — about $10 million in surplus, the TIF started to expand the projects in the plan and add others.

For example, in the plan, the Clemson city hall was to get an $800,000 facelift. In the end, $2.6 million was spent.

In the plan, College Avenue was to get $553,000. They spent $2.2 million on College Avenue and expanded the spending beyond that area.

The second complaint is the law states if the annual TIF revenue rises above the annual bond payment, that extra TIF revenue is surplus and must be returned annually to the taxing authorities.

The TIF’s annual revenue grew to $1.75 million — $825,000 was used to make the annual bond payment, but the remaining $900,000-plus was surplus to be returned annually to the taxing authorities. Instead, that money was being spent. Over the life of the bond, the total interest and bond payments will be $10.9 million. $21 million was coming in, so again we saw the surplus as about $10 million.

Representatives from the county and school district met with Clemson government leaders three times to try and settle this out of court. We offered splitting the difference of $10 million surplus and settling for $5 million.

We weren’t trying to bankrupt the Clemson government. We were trying to settle it in a palatable way. They rejected our offers. Suing the Clemson government was our last resort.

The judge split the $10 million dispute, very much as we proposed initially.

From 2011-12 through the end of the TIF in 2016-17, the judge declared the annual TIF revenue above the bond payment as surplus. The annual revenue is running about $1.75 million and will likely grow to $1.8 million or so over time. The bond payment is about $825,000. The surplus is going to be near a million per year on average for the six years from 2011-12 to 2016-17. In sum, it looks like the TIF has been ordered to unleash about $5.5 to $6 million, which will be given to the three taxing authorities.

The city of Clemson will reap about 25 percent, the county 20 percent and the district about 55 percent of that ballpark figure of $5.5 million to $6 million.

The six year look-back and look-ahead entitles the school district to about $3 million in total under the ruling.

After the TIF ends, in 2016-17, all the TIF revenue (about $1.8 to $1.9 million by then) will flow to the three taxing authorities and the school district will get a bit more than $1 million a year. About 1/3 of that will go to school district debt service and 2/3 to operations.

Clemson could appeal the $5 million judgment, or it could just pay the judgment. The law says Clemson was entitled to nearly 11 million for the TIF. The extra $10 million is surplus that should have gone back to the taxing authorities. The judge’s ruling splits the $10 million surplus, so Clemson gets $5 million of the surplus or $15 million total, and the district and county are getting about $5 million. The ruling was more than generous to Clemson.

Alex Saitta

School Board trustee

Pickens

In support of Bill Connor

Dear Editor,

As a peace-time veteran of the 82nd Airborne Division, I am supporting Bill Connor for the U.S. Senate seat now held by Lindsey Graham (Jean, my partner of almost 50 years, agrees with our support of Connor).

Connor, a constitutional conservative, is a Citadel graduate, a 24-year Airborne Ranger Infantry officer and Afghanistan combat veteran, a Lt. Col. in the Army Reserves and a partner in a successful general law practice in Orangeburg.

In a recent press release, Connor said, “Now, I don’t say all of this to mean that Sen. Graham has not supported our troops and veterans. That’s actually one thing I will not knock him on. But he’s been in Washington too long, disappointed us too many times with votes that don’t represent our values, and supported far too many questionable foreign policy measures.”

Well said.

Dean Thomas

Liberty