CARLISLE – Carlisle Area School Board could decide next week whether or not to appoint one or more representatives to a future Tax Increment Financing committee tasked with steering a proposed strategy to spur redevelopment of the former Lear/IAC factory site.
Board members Brian Guillaume and Fred Baldwin have offered to serve on this committee that would determine what infrastructure improvements should be supported by a TIF strategy and plan a course on how to proceed.
The board Thursday discussed the merits of a proposed resolution that would authorize board President Nancy Fishman to appoint representatives to the committee. The resolution could come up for a vote during the next meeting scheduled for July 16 at 7 p.m. in the large group instruction room of the Fowler Education Center.
A vote next week would not commit the Carlisle Area School District to a TIF strategy, Director of Finance Shawn Farr said. Instead it would give the district a seat at the table as the TIF is being discussed.
Under this strategy, the Cumberland County Industrial Development Authority would borrow money in the form of bonds against the anticipated tax revenue that could be generated from drawing future development to the site. The money borrowed would help pay the upfront costs of installing infrastructure improvements that create an incentive for developers to put a project on the site.
The expectation is that tax revenue generated by the former Lear/IAC site would grow over time in increments as the factory site is developed. This revenue could then be channeled toward paying down the debt service on the bonds. Once the debt is paid off, revenue from this new development would then be diverted back to the taxing bodies that sign on in support of the TIF strategy.
Borough officials on June 11 briefed the school board on the details of the strategy and asked board members to consider appointing representatives to the steering committee. During the briefing, board members asked how the district would account for revenue diverted by the TIF on its annual audit.
To answer the question, district administrators contacted staff at the accounting firm of Smith Elliott Kearns & Company. Farr briefed the board on the answer he received from the firm.
Under a TIFF arrangement, real estate taxes due on the factory site would continue to be assessed by the district and recorded as revenue received from the Carlisle Borough tax collector, Farr said. When received, any revenue related to the incremental increase would be considered a liability until it is remitted by the district to the county development authority.
“The revenue in and expenditure out for the TIF related tax funds would be equal and not impact the financial results of the District,” Farr said. “The two would net out in the books. We would take it in as revenue and, in short order, we remit it back. It would wash out within a fiscal year.”