Pending state legislation would allow a seldom used financing plan to boost the newly designated Terre Haute Arts & Cultural District and similar districts around the state.
Senate Bill 255, authored by Sen. Jon Ford, R-Terre Haute, would permit creation of cultural district development areas. Increased revenue from sales and income taxes within the areas would be transferred to an Indiana Arts Commission trust fund to be used for the benefit of the areas.
The bill cleared the Senate Tax and Fiscal Policy Committee last week on an 11-2 vote after being amended to cap the amount of increased taxes that could be set aside at $250,000 per year instead of $500,000 as originally written.
Following committee action, the bill gained two additional Republican authors and two Democrat co-authors.
Ford helped create statewide cultural districts in 2010 as a member of the Indiana Arts Commission.
“It's always been in my mind that step two would allow cultural districts to capture some of the revenue they generate to help them continue to grow,” he said this week.
A cultural development area “would be very beneficial” to Terre Haute, said Jon Robeson, executive director of Arts Illiana. “It would help us in our progress to really help the downtown area define itself better. This is great for our artistic and cultural treasures if it passes.”
The near-future addition of the Vigo County History Center, CANDLES Holocaust Museum and Education Center and Larry Bird Museum will bring to eight the total number of museums in or around downtown. During his recent "City Update" presentation, Mayor Duke Bennett put the number at nine. However, the 500 Museum of Wheels recently closed following the sale of retired banker Don Smith's car collection.
Others nearby are the Swope Art Museum, the cultural district's anchor; Clabber Girl Museum; Terre Haute Children's Museum; Eugene V. Debs Museum; and Veterans Memorial Museum.
Robeson said he sees establishment of a cultural development area as “an exciting economic development opportunity.”
He described creation of the arts and cultural district, announced in December, and the construction of a convention center “a fusion of events that could really make things happen at a high level. We're talking about something that would be the envy of a lot of communities.”
Other Indiana cities with arts and/or cultural districts are Bloomington, Carmel, Columbus, Fishers, Jeffersonville, Lafayette/West Lafayette, Madison, Nashville and Noblesville.
Terre Haute and Vigo County have several tax increment financing districts that capture increases in property taxes to fund economic development. This would be the first local district to use increased sales or income taxes.
Sales tax increment financing was first used in Indiana in 1987 for Circle Center Mall in Indianapolis, according to a 2017 report by the Indiana Fiscal Policy Institute. Only “on rare occasions,” the report noted, has the state given local governments authority to divert some sales tax revenue.
The Legislature passed, and Gov. Eric Holcomb signed a bill that was the subject of the report to allow use of sales tax, income tax and property tax increment financing to develop areas around commuter rail stations in Northwest Indiana.