With state funding for education on the decline, every dollar matters. In the last 10 years, state funds for Meridian Technology Center have been cut by more than 20 percent. Meridian’s mission is to train students to enter the workforce, work with existing businesses to make them stronger, and our business incubator supports the creation of new companies. Funding for Meridian is vital to ensuring we can fulfill the critical roles of educating students and economic development.
The Stillwater City Council wants to take money voters earmarked for Meridian and use it to stimulate economic development in an area that is already growing, if not thriving. They want to do that through the use of Tax Increment Financing, also known as a TIF. A TIF is a defined section of a community, up to 25 percent, that is created with the intent of stimulating economic growth. This TIF will last 25 years or until it reaches $32.5 million. A 25-year TIF is a full generation of students.
According to the Local Development Act, TIFs are to be used in economically depressed areas, blighted areas or areas where development will not occur but for the implementation of a TIF. Any growth in funds above the baseline tax at the time the TIF is implemented is diverted away from the taxing entities that normally receive the funds to the TIF district.
Why Meridian doesn’t support this TIF
There are two main reasons Meridian doesn’t support this TIF.
TIFs are designed to stimulate economic growth in underdeveloped areas. As mentioned, this proposed area is already growing, if not thriving. Here’s how – over $82 million in new development will soon be taxed and officially added to the tax rolls in 2019. This amounts to over $650,000 annually that will be diverted from entities like Meridian toward the TIF. For Meridian, this is a loss of $139,000 each year for 25 years. This doesn’t take into account any future growth in that area.
Without the TIF, these funds would be guaranteed to go to the tax receiving entities that usually receive them. That includes Meridian Technology Center, Payne County, Payne County Health and Stillwater Public Schools.
When asked that these already developing areas be excluded from the plan, city officials said that without them there would be no funding source for the plan.
The second reason we don’t support the TIF is because the City Council has provided no defined plan for use of the TIF money. No real costs are given, only a plan to redirect revenue into a fund for some future use.
Working together for economic development
When used properly, Tax Increment Financing can be a tremendous economic development tool.
There is no question that economic development is important. In successful communities, all entities work collaboratively together. This has been the case in Stillwater with city and county governments, educational entities and the private sector working to ensure Stillwater is a community we can be proud of and prosper in.
As part of the review committee that met early in the process, and in an effort to see this partnership thrive, Meridian offered four modifications for a compromise that would still help the city accomplish its goals.
To better meet the intent of the law that TIFs are designed to stimulate economic development not to capture growth that is already occurring, we asked the city to change the boundary lines to exclude the $82 million in property within the TIF district just waiting to be added to Payne County property tax rolls in January.
A second recommendation was that instead of capturing 100 percent of the growth in the TIF district, they allow all entities affected to receive four percent of the growth over the life of the TIF.
The third recommendation was that the city provide specific detail for how funds would be used so that new growth in the district could be attributed to the TIF.
Finally, we asked that the city consider removing the special financial consideration for Stillwater Public Schools or provide some type of equal consideration for all impacted entities.
These recommendations were all rejected.
What you can do
We encourage you to inform yourself about what the city is planning and contact city council members to express your concerns. The final of two votes is scheduled for Monday at the city council meeting. More information can be found at meridiantech.edu/EducationFundingMatters.
Dr. Douglas R. Major is CEO/Superintendent of Meridian Technology Center.