Sioux Falls is falling all over itself to give up tax dollars to corporations who don’t need any more incentive to move to one of the cheapest labor markets in the country. Why not let smaller towns slit their own fiscal throats for the sake of a few jobs?
Representative David Anderson (R-16/Hudson) is pushing House Bill 1143, which would allow second- and third-class municipalities (that’s our 98 towns with population between 500 and 5,000 and 195 towns with 500 or fewer people) give back municipal property taxes to “any industry that further’s the municipality’s industrial development goals.”
Given that most small towns’ #1 industrial development goal is “Survive!”, HB 1143 gives local councils carte blanche to hand back taxes to every employer in town. And if we create that authority, every employer in town will come asking for a get-out-of-taxes-free card, creating a race to the bottom in which already fiscally suffering communities will fear imposing any property taxes on any business that could move to another town that is more willing to scrape by on nothing but sales tax.
Naturally, I have to ask why only industries in towns should get that break. Shouldn’t the workers who choose to live in those towns and make those industrial goals achievable get refunds on the property tax they pay on their humble abodes? Shouldn’t HB 1143 also include county governments so they can rebate agricultural taxes to the land barons and CAFO kings who keep local industry alive?
Now I suppose we could argue that if a community is dumb enough to whittle away its property tax base until it’s sitting on a one-legged revenue stool, well, let them undermine their own viability. But sometimes we have to protect communities from their own desperation. Small towns may think tax handouts will help them recruit and retain businesses and create jobs, but tax breaks don’t produce such results. An endlessly expanding panoply of tax rebates leads to a dwindling ability of local governments to meet the basic needs of their residents. We can’t stay “Open for Business” if we can’t provide workers with a community-supported quality of life.
House Bill 1143 passed the House with minimal opposition. It awaits the attention of Senate Local Government.
If low taxes were the imperative to economic growth, then South Dakota would be an economic wunderkid.
HB1143 is part of the republican policy to pick winners and shower them with ill-gotten awards at the expense of the little guy.
The Municipal League and county commissioner organizations should take a stand against this legislative meddling with their authority.
Is there nothing in the GQP world that a tax cut can’t cure?
Tax cuts have CURED sustained growth, quality of life, and income equality.
We are governed by people who want to make Grover Norquist’s dreams come true. They want a society where they don’t have to pay taxes, where the market makes all decisions.
Cory, thanks for posting. TIF 23 is going to be one of the most disastrous things to ever happen to Sioux Falls, I don’t say this as an economist, I say it as someone who has watched local government here the past 20 years.
This would be an interesting thing in small towns. Most businesses like you said would try and get out of paying taxes.
These tax breaks and TIF’s are just out of control. Governments role is to provide services like roads, water and sewer. Governments need to get back to their role and provide good services. Poor streets, poor drainage, poor sidewalk, etc are hurting so many communities.