A new policy governing how the Shawnee Mission School District will review development plans seeking tax incentives is being described as a good compromise by city officials.
The TIF policy was adopted with little discussion this week by the school board. But it comes after six months of talks with city officials who opposed an earlier draft of the policy.
“The way it’s now written strikes a good balance between the school district’s desire to protect its revenue streams and our needs,” said Chris Engel, city administrator of Merriam. “We do need this to be a partnership.”
School districts in Kansas have veto power over TIF proposals, and the new policy was established after a lengthy and sometimes testy exchange last year between the district and Prairie Village officials over the Meadowbrook redevelopment plan.
The Meadowbrook project, which is redeveloping the former country club property into a county park and residential development with some commercial, sought $15- to $18 million in TIF assistance.
TIF allows the additional or incremental property and sales taxes generated by a project to be returned to the developer to pay for eligible improvements for up to 20 years. The property continues to pay the tax revenue based on its pre-development value.
With property taxes a major source of local revenue for schools, it’s an important issue.
The first draft of the TIF policy prepared for the SM School District last March sought to put a 50 percent cap on the amount of incremental property taxes that could be returned to the developer.
That proposal drew strong opposition from communities in Northeast Johnson County and the Merriam City Council adopted a resolution in opposition. That launched negotiations between the district and cities to find a compromise.
The new TIF policy adopted by the board dropped the 50 percent property tax cap proposal. It instead says the district will be more favorable to TIF projects that rely on the sales tax than property taxes.
The new policy also emphasizes the importance of local property taxes, noting that it’s a major non-state source of revenues used for capital expenditures such as building or renovating schools and other facilities.
Quinn Bennion, city administrator of Prairie Village, praised school officials for their willingness to discuss revising the original draft of their policy.
“There was concern about the first versions because there were provisions that placed the school board and their committee into more of an economic development role,” he said.
“What they’ve come up with is something we can work with the school district on future projects.”