Tuesday, January 31, 2006

More on TIFs

From Talk to Tony, the left-leaning blog of Tony Palmeri, a link a free-market Reason Magazine piece on TIFs, the increasingly popular tax giveaway that local officials use to claim credit for economic development.

Palmeri prefaces his discussion of the issue with the following:
As a general rule, when elected officials, bureaucrats, and the corporate press get guarded and defensive about some program, there’s probably something wrong with that program. The best example is Tax Incremental Financing (TIF). In Oshkosh, criticisms of TIF can actually get a person red-baited. Back in June of 2002 the Oshkosh Northwestern editorial board picked on unnamed TIF critics whose criticisms were said to be “something like what Fidel Castro might be spouting on a parade espousing the value of communism in Cuba.”
We can assure him that we wouldn’t red-bait him on this issue. Others, maybe.

Among the many absurdities mentioned in the Reason piece is the following:
Until the 1990s, most states reserved TIFs for areas that could be described as “blighted,” based on criteria set forth by statute. But as with eminent domain, the definition of blight for TIF purposes has been dramatically expanded. In 1999, for example, Baraboo, Wisconsin, created a TIF for an industrial park and a Wal-Mart supercenter that were built on farmland; the blight label was based on a single house in the district that was uninhabited. In recent years 16 states have relaxed their TIF criteria to cover affluent areas, “conservation areas” where blight might occur someday, or “economic development areas,” loosely defined as commercial or industrial properties.

The result is that a TIF can be put almost anywhere these days. Based on current criteria, says Jake Haulk, director of the Pittsburgh-based Allegheny Institute for Public Policy, you could “declare the entire Western world blighted.”
And that’s just the tip of the iceberg where problems with TIFs is concerned.


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