February 25, 2008

Who Should Decide on Tax Increment Financing?

Anytime you can put "Municipal League" and "TIF Commissions" in the same headline, you know you have an exciting story! (To me, at least, which may say a lot about me.) Today’s Post-Dispatch has the story of a recently filed lawsuit challenging the new state law that puts more authority for the use of TIFs in the hands of a countywide commission, rather than municipal commissions. I can see you are getting more interested with each passing word. …

As they are currently established, TIF commissions are dominated by representatives of the municipality the TIF is proposed for, people who generally only care about that particular municipality. However, the tax decisions they make affect entities beyond municipal borders. I strongly feel that having a county commission make these decisions, while taking into consideration the effects the TIF will have on the county as a whole, is a much better way to debate and consider tax-increment financing.

The municipalities are screaming that this is an infringement on their rights, as though the residents of a certain city are not also residents of the county, too. They claim (emphasis added):

The suit noted the law adds the county commissions to municipal panels, opening the door to legal challenges to projects with tax increment financing. Investors would not put money into such projects because the of the risk of suits, the plaintiffs say.

So investors might not finance projects that get to kick people out of their homes and are guaranteed to succeed by the government because they don’t have to pay the taxes other businesses pay?  That would really be terrible. …

Almost all abuses of TIFs and eminent domain (which are related, but not the same thing) have occurred at the municipal level — particularly in St. Louis County. The record of municipalities making responsible decisions about the use of TIFs does not generate confidence. I believe that the lawsuit has at heart the interests of municipal government and developers — not the interests of residents of St. Louis County. As such, I hope it is thrown out of court and County Executive Dooley gets to appoint a countywide TIF commission that has final say on ALL TIF proposals within the county.

It’s good to be back blogging after some time focusing on other things here at Show-Me!

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