Tax increment financing is that special deal local governments hand out to developers and other bigwigs to let them divert their property tax from public use to private construction costs, on the presumption that without this subtle welfare check, development just won’t happen.
According to recent research in Missouri, tax increment financing is a sham:
For a uniform examination of incentives, last year the Show-Me Institute turned to William Lester of the University of North Carolina at Chapel Hill, who previously researched tax-increment financing (TIF) in Chicago, to study the likelihood that Missouri incentives are driving development. Lester and his associate Rachid El-Khattabi examined the period from 1990 through 2012 in both cities, looking at employment, business counts and sales figures down to the census block. Perhaps most importantly, these researchers compared areas that had received TIF subsidies against similar areas that had not. They found no great differences in changes over time, indicating that it was not the TIF program that was creating economic growth. “Overall,” they concluded, “the analysis conducted in this study finds no support for the claim that TIF generated tangible economic development benefits in either Kansas City or Saint Louis” [Patrick Tuohey, “Jobs, Growth and the Dubious Worth of Tax Incentives,” Governing, 2018.12.04].
As of 2017, South Dakota claims that its TIF districts have incentivized $918 million in projects that have added $1.413 billion in someday-taxable property value and Gaia-knows how many jobs. How many of those projects and jobs and how much of that property value would have happened without local governments’ helping hand is unknown, but Dr. Lester’s research suggests it’s less than what our civic leaders claim.
Recently overlays of 3 major TIFs in RC (including 4 story glass BHE complex perched on Highwy 16 viewshed) have become more controversial and contrary to fill-in vs. fringe development planning policy.
I admit that I’m suspicious of any welfare that goes to the already wealthy. That being said, I can’t see it stopping unless things like TIFs are changed somehow to end the blackmailing of local governments. Or completely outlaw TIFs, but I’m sure there are legitimate uses for such tools.
He had a Muslim helping him? Conspiracy?
Exactly. Welfare for the rich. If the federal government can audit the Pentagon, then it ought not be hard to audit the smaller SD government and its allegations of TIF and other corporate welfare.
“Gold Star” highly regarded RC’s Hani Shafei (at least one TIF) makes national news suing city leaky waterline creating wetland on hundred acre Orchard development property.
Welfare for the rich—we should have a standard: if the person asking for a handout makes six figures, the handout does not happen.