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City staff warn state TIF changes could strip about $800,000 from Sheldon increment
Summary
City Manager Sam Quaker briefed the council on pending state legislation that, as drafted, would remove the school foundation levy from TIF calculations and could reduce Sheldon’s annual TIF increment from roughly $4.2 million to about $1 million, costing the city an estimated $800,000 in accessible funds.
City Manager Sam Quaker, with assistance from Scott Stevenson, briefed the Sheldon City Council on pending state legislation that would change how tax‑increment financing (TIF) is calculated and could significantly reduce the city’s available increment for projects.
Quaker told the council that Sheldon’s current annual TIF increment is roughly $4.2 million and that, under the draft changes discussed in the state legislature, the city could lose at least about $800,000 in the near term if the school foundation levy is removed from the TIF calculation. A broader provision described in the discussion (referred to in the meeting as "652") could force retirement of older renewal areas and reduce the city’s TIF capacity further—potentially to just over $1 million of increment, Quaker said.
Staff stressed this would affect both capital projects and ongoing services: projects now funded with TIF could need bonds and general property‑tax shifts if local increment is reduced. Quaker outlined a six‑part municipal strategy the city has used for managing TIF and urged council members to treat the forthcoming budget cycle as an opportunity to draft a plan B that prioritizes essential projects should legislative changes pass.
Next steps: staff will continue monitoring the bill’s progress, present budgeting scenarios that remove $800,000 of TIF capacity, and convene further discussion during the upcoming budget process.
