TIFs are a nightmare! My city has several – each is a scam that benefits politically influential special interests. I live in Virginia Beach VA.

The problem with TIFs is that they ear mark future taxes for special interests, leaving the general fund to flat line and thus, forcing more tax increases.

In my city TIFs are used for funding wealthy developers that were going to invest anyway – the TIF just made the deal sweeter for them. Often these TIFs are marketed to the public as some sort of “investment’ – however, the “investment” doesn’t return any increased funding to the general Fund; rather the increased costs of public services and new “public” infrastructure far out weighs the new increase in taxes collected.

The other problem with TIFs is that they often set a baseline year and take ALL increases in property value since the baseline year. The propoerty would have increased in value without the TIF, but that non-develop increases in taxes is now redirected to benefit the developer’s project, now to benefit the residents of the city outside of the TIF development.

Of course the TIF also eats up any of the city’s available credit (bond potential) for non-essential so-called “economic development” boondoggles; thus maxing out the city’s “credit card” when it comes time to borrow money for real needs, such as new schools or replacing worn out transportation infrastructure.

If new “infrastructure” is desired by developers then I prefer a “Special Taxing District” instead; this way, those property owners that benefit most from the new “public” infrastructure (like the $1.6M Italian marble fountain in our new TIF funded “Town Center”, or the $100M addition to the Lynnhaven Mall) are the ones that pay – and the increased property taxes go directly into the General Fund – thus REALLY offering residents a benefit – now.

Not 37 years “later” when the bonds are actually paid off.

Again a TIF in and of itself is not a tax break of any kind. It redirects the tax revenues that the owner would be paying anyways towards debt service instead of general fund purposes.

Now you could consider any taxes paid at all ‘stolen’ and certainly thats a different argument but not one that has anything to do with TIFs.

Bullshit.

There is one problem with “this approach”, and it’s that you’re talking about stolen money.

Get your head on straight.

While i am a libertarian, I still think that TIF’s do have the capacity to be a useful development tool. Most TIF’s are set up to finance infrastructure improvements such as roadways and streetscapes that are for public use and not given as a cash contribution. (not knowing Missouri’s laws, i’m not sure if this is the case there..)

However, I have two issues with your analysis:

1) Development is not a zero sum game. Yes, that Wal-Mart could go anywhere. But perhaps the location of THAT Walmart would be so good that it wouldn’t impact the business decision of placement of another store in the area. Maybe that Walmart entices a Target to come and set up a competing store nearby. also benefit the tax rolls of some level of govt, if not that municipality.

2) If businesses are being given tax breaks or eminent domain as a package in combination with TIF, than its not the actual TIF thats causing lost revenue. Theoretically, (and depending on state laws) TIFs should be set up to draw away only revenues that are to go to the general fund of the municipality and redirect them towards paying debt service on the issued bonds.

In some municipalities all revenues (including school and county) go towards the TIF, but thats is more a problem of the language in the legislation than the concept. The actual taxes paid by the landowner/developer should be the same as they ordinarily would be if only TIF is considered.