Jason Semler, a consultant with Baker Tilly, told the Mooresville Town Redevelopment Commission at its meeting that recent state-level exemptions and deductions will reduce the tax increment the commission can capture over time.

Semler presented the commission’s annual TIF (tax-increment financing) report and said the changes enacted in the most recent legislative session will “reduce taxes for those individuals, but not so good for the TIF or the revenue that we’re gonna be receiving from the school district, or the counties, or the town.” He added that homestead exemptions phased in under the new law mean the town will collect less TIF revenue “going forward in the future.”

The consultant walked commissioners through the packet’s detailed tables and illustrative projections. For 2024, Semler said the estimated increment of about $3,531,000 was exceeded by actual collections of roughly $3,600,000. He said the commission is anticipating roughly $4,100,000 in tax increment in the coming year and showed a scenario in which increment rises again later as certain property tax abatements “roll off.” Semler noted a projected increase in 2026 in some areas because previously exempted abatements will end.

Semler also reviewed the commission’s outstanding obligations and long-term bond commitments. He said the bonds refunded in 2021 have about $9,000,000 outstanding and that the commission pledged $300,000 a year in TIF toward 2010 SRF (State Revolving Fund) utility bonds. Semler characterized the commission’s fiscal position as “still strong” while noting those obligations and planned projects the commission has identified for future TIF use, including Innovation Park construction, the Main Street project, Pioneer Park upgrades and sewer upgrades.

Semler gave a short primer on how TIF works and on the difference between capturing new assessed value (the increment) and the tax levies that fund overlapping units such as the county, township and library. He said the net effect of capturing new assessment into a TIF area is to reduce the tax rate for overlapping units while using the increment to finance infrastructure and incentives in the TIF area.

Semler and staff told commissioners the detailed numbers are in the mailed packet; Chelsea from the clerk’s office will work with the commission on a formal spending plan that is due December 1. Semler said his team will continue to monitor legislative changes and update the commission as new guidance becomes available.

Semler’s presentation and the packet provided a multi-year projection showing gradual decreases in TIF receipts as the exemptions take effect, partly offset in specific years by the expiration of certain abatements. Commissioners asked no substantive follow-up questions during the presentation.