[Electronic-lan] CC Study Session Tuesday: Update on downtown grocery store

Sat Dec 9 00:03:29 CST 2017

Food for thought:
TIF Accountability and outcomes

Many proponents of TIF argue that improvements made under theprogram “pay for themselves.” That is, cities and towns assume that TIF willspur new development, increase property values, and create new tax revenue thatwould not have existed otherwise, which will be used to pay off the costs ofthe development.

This is a risky wager since it assumes that“but for” the TIF, no development would have occurred in the TIF district andproperty values would have remained unchanged. In reality, it is impossible toknow whether a project will successfully generate the anticipated taxincreases. It is also difficult to determine whether property value increasesthat do occur in TIF districts were exclusively the result of the TIF.

The “but for” provision in many TIF laws hasalready been weakened to allow TIF to be used on almost any project. In moststates, TIF was originally intended for use only in areas deemed “blighted” or“distressed” where investment would not otherwise occur. Many states have sinceloosened their TIF criteria to allow TIF to be used to develop non-blighted andaffluent neighborhoods (see Good Jobs First's report Straying from Good Intentions on the weakening of TIF and enterprisezone requirements).

In the end, the “but for” provisions of stateTIF laws often fall by the wayside, allowing TIF to finance development thatwould happen anyway. This results in a loss of revenue that could have gone topay for schools and local services. Given that the diversion of taxes continuesuntil the TIF district expires, which is typically 7 to 30 years, the long-termfiscal impact can be quite significant.

. Every TIF agreement should also contain aclawback clause requiring developers to pay back all or part of the subsidy ifthey fail to meet their job, wage, and other responsibilities.

https://www.goodjobsfirst.org/accountable-development/tax-increment-financing

“Wait a minute!  I’m paying taxes so that the Waltonfamily, the richest family in America, can be richer?  I’m paying taxes sothe Cabelas out in Nebraska or Johnny Morris who owns Bass Pro can getricher?  That’s what my taxes are going for?  That I am forced topay?”  People don’t know about it.  That’s the only reason this goeson everywhere.

http://prairieweather.typepad.com/the_scribe/2008/01/free-lunch-davi.html

Well, what is taxincrement financing? I’ll tell you what it is. You go to the store with yourgoods, you pay for it at Wal-Mart, and there’s a very good chance that thatstore has made a deal with the government that the sales taxes you are requiredto pay, that government requires you to pay, never go to the government.Instead, those sales taxes are used to pay the cost of the store. And typicallyin those deals, the project is tax exempt, just like a church. 

https://www.democracynow.org/2008/1/18/free_lunch_how_the_wealthiest_americans

    On Friday, December 8, 2017 6:27 PM, Melinda via Electronic-lan <electronic-lan at lists.ku.edu> wrote:

   https://assets.lawrenceks.org/assets/agendas/cc/2017/12-12-17/grocery-store-project-staff-memo.html After reading this, I'm pretty sure I won't live to see this happen. If it ever does. ...Melin
  -- 
 "The first lesson to be learned by every citizen who desires to bring about a higher life in our American cities is that he must take an active part in managing the affairs of his own city."
 --Theodore Roosevelt, The Outlook Magazine, Dec 21, 1895 _______________________________________________
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