Entries Tagged 'Property Taxes' ↓

Why TIF financing just doesn’t add up

Today in the Argus Leader, they did a story about the Washington Square developers applying for a $4.6 million dollar TIF. They contend they deserve the TIF based on the fact that they will provide FREE public parking of 189 spaces (at night and weekends ONLY).

This is where the TIF funding does not add up. As of right now they pay about $7K a year in property taxes, after the project is completed they assume the property tax bill will be $500K per year. What they don’t tell you is when you subtract the TIF rebate value from that tax bill, the government entities will NOT be receiving these taxes until 9 years after the project is completed (around 2025-26).

We can talk tax benefits all we want, but when we don’t provide TIF’s and private investors figure out how to build these projects with their own money (remember last year we had record building permits with NO TIF’s issued), the community benefits from the property taxes immediately after the project is completed, not 8-9 years later.

Darrin Smith gets Tifilicious at the County Commission meeting

YouTube Preview Image

(starts at 20:30)

Funny how the commission gets to see this presentation before the council – or at least I can’t recall the council getting the presentation yet?

Darrin explains TIFs before the new TIF presentation. While he is correct that TIFs don’t cost taxpayers up front (even though we are footing the bill to administer them) we are losing property tax revenue for several years. Basically the developers are paying themselves property taxes and using the money to pay for the development.

More property tax cuts for the rich in Sioux Falls


The Baker House, formerly Scott Heidepriem’s residence (I believe this photo, to your far left, was taken while Scott still owned it).

I guess if you can’t get a TIF to fix up your mansion, you can always get a historical designation;

A 98-year-old house and two other buildings constructed in the 20th century in Sioux Falls have received eight-year property tax moratoriums to help with maintenance and rehabilitation (through the South Dakota State Historical Society).

A home in the McKennan Park Historic District also received a property tax moratorium. The Baker House at 503 E. 21st Street is a Tudor Revival style of architecture that needs replacements.

While I think the State Theatre could use it, I am struggling with a private residence. Not only is it a behemoth three-story mansion, but besides being worked on (for over a year now) it is also been added onto. I think it is great that someone is ‘fixing up’ a historical home (for the record my house is 125 years old and could use some repairs) but to ask for a property tax cut? Seriously?

The wealthy already enjoy low taxes in South Dakota and NO income tax, now when they buy (an already well-kept) mansion, they want a tax break?

Oh, I can hear it already, I’m a hypocrite because I posted in the past about TIF’s for cleaning up older homes in the central part of the city. Trust me, when I talk about fixing up homes in the core of the city, this place DOES NOT come to mind. I live about a mile from the home and walk past it weekly with the dog. When Scott owned it, it was well taken care of, and after he sold it, I noticed the new owners doing a massive rehab on it. Don’t believe me, just drive by. It is straight EAST of the Tennis courts at McKennan Park on 21st Street.

Wonder who the new owner knows on the Historical Society’s board of trustees :)

The Value of TIF’s in Minnehaha County

Commissioner Jeff Barth sent this information to me from the county’s equalization office;

The combined worth of TIF’s in Minnehaha County is $91,326,856.  Of this number the base value (Number that is taxed and distributed to all entities) of $28,861,936 is subtracted from the total leaving $62,464,928 that is considered increment value and is taxed and used to pay off the Increment Districts.  I can show you individual projects if needed.  TIF’s are in the County, Sioux Falls City, Brandon City and Dell Rapids City.

So are the county’s tax valuations accurate and fair?

Interesting that we were just talking about this the other day on the blog, and our ever increasing property taxes. But this puts a new twist on it;

A lawsuit rising from a disputed property tax assessment involving Minnehaha County could set a troublesome precedent, county officials say.

Hutchinson Technology is suing the county, claiming the sale of a 300,000-square foot building to Sanford Health in 2009 showed the county greatly overvalued the building for tax purposes. The site at 2301 E. 60th St. had been the Hutchinson Technology campus. Sanford acquired it to be its research headquarters.

The most recent assessed valuation before the sale was $18.6 million. But Hutchinson Technology sold the site to Sanford for $12 million. Now Hutchinson Technology is challenging tax assessments from as far back as 2005 and possibly to 2001, according to Kersten Kappmeyer, Minnehaha County state’s attorney chief civil deputy.

Make no mistake, I have often thought state and local governments are greedy when it comes to taxing individuals, nickel and diming us on higher utility rates and fees. Continuing opt-outs for crime prevention and punishment (when changing state laws for non-violent drug offenders would fix the problem) while handing out TIF’s to the big boys and not taxing profits of corporations.

If the County loses this lawsuit, the ripple affect could be devastating, for their coffers anyway.

Why does the SF School District have so much in reserve funds?

As I was reading this article about teacher raises (which I fully support) something else in the article concerned me;

The school district can afford the pay hike because it has spent less than it planned to for years and has an oversized reserve fund. Their 2013-14 budget alone looks to spend $6.6 million of their $22 million in general fund reserves.

$22 Million in Reserve Funds! As our property taxes continue to increase why does the school district have so much in reserves, when . . .

1) They haven’t discussed substitute teacher pay increases.

2) The city continues to give out property tax breaks in the form of TIF’s to private developers.

3) There has never been a discussion about building a public indoor pool at one of the High Schools.

It seems the school district is swimming in money, so why do my taxes continue to go up?

Thanks County Commission

I would like to personally thank the Minnehaha County Commission for raising my property taxes almost $40 a year so they can have a raise (for an elected, part-time position they CHOSE to run for). Rat Finks!

Why is Sanford being awarded a TIF? Just Curious.

I found these two items interesting on the Planning Commission Agenda from Wednesday. Good luck watching the video though, I have noticed that it takes a few days for the Planning Commission Meetings to be posted on SIRE. Not sure why? Maybe it has something to do with Personnel matters :)


How nice. The Gargoyle Leader’s Ed Board cares about tax payers, now that we are all flat broke

I had to read this editorial twice to make sure, they were saying what I thought they were. I’m shocked!

The allowance to raise property taxes by 3 percent or the rate of inflation each year is just that. An allowance.

It’s not an automatic function that city officials should customarily build into each year’s budget.

Yes, but that is the nature of socialistic, tax and spend, big government Republicans, they don’t care if the average Joe can make ends meet, they only care about their ‘ends’ and ‘behinds’.

As residents continue recovering from the economic downturn, a respite from property tax increases undoubtedly would be well timed.

Indeed, there are times when even in the face of economic downturns it makes sense to spend in ways that take advantage of unique opportunities – such as issuing needed bonds when interest rates are low.

It’s hard to see how automatically raising property taxes fits into this category, though.

Actually, it’s the exact opposite. The 2010 budget offers a unique chance to hold the line on property tax increases.

City officials need to offer a better reason than they’ve stated why Sioux Falls should pass on this opportunity.

You mean, you agree with Staggers for once? Get out!

Property Tax Hypocrisy

While the city and county are considering property tax increases on the rest of us, developers are pushing for a huge tax cut incentive;

Sioux Falls Mayor Dave Munson’s budget for next year includes a 2.4 percent property tax increase for city residents, designed to raise almost $960,000.

Developers want the city to give them a significant tax cut in the first 5 years they develop new property;

Those officials have proposed a formula that would give builders a two-year window to start projects that would qualify for a lower property tax bill. The program would apply to some commercial, multifamily housing and industrial projects. It wouldn’t apply to single-family residences because state law does not permit local governments to offer tax breaks for that type of construction.

A qualifying project would pay 20 percent of the taxes in its first year after completion. The bill would rise 20 percent each year thereafter until it hit 100 percent in the fifth year.

While our city leaders(?) are lauding a property tax increase as something we NEED to do (actually we don’t) the special interests that fund their campaigns are asking for a handout. I might be for the plan if Sioux Falls was behind on commercial development, but we are not, in fact their is tons of office space available for lease right now, just drive around and count the signs. I have often said that DEMAND drives development, not tax cuts. This whole idea was cooked up by Clayton Jamison who co-owns his development company with his father former concilor Bob ‘General’ Jamison and his brother current councilor Gregg Jamison;

Industry officials are billing it as a mini economic stimulus that could save jobs. Developer Clayton Jamison, who is among those pitching the plan, said there have been widespread layoffs in the industry. For those still employed, hours and overtime have been slashed, adding burdens to families.

Hey, Clayton, every industry is hurting in Sioux Falls. Why not give the working stiffs tax cuts instead of yourself? The worst part about the proposal is that his brother Gregg helped cook this up. Not only should Gregg not be voting on the proposal, he shouldn’t even be discussing it in his official position. It is a huge, huge, conflict of interest, considering Gregg is partners with his brother in the business, which ironically is behind on property taxes on his new developments. Is their proposal a plan to help spur development or is it a plan to help them out personally? I think the answer is pretty freaking obvious.

Steve Van Buskirk of Van Buskirk Cos. said the tax savings could be enough to persuade some businesses to start projects now rather than wait.

Hey, Steve, how about leasing the space you have available right now instead of building new space. I think Mike Cooper and Vernon Brown sum it up best;

“We don’t really have any suitable data to understand what impact this may or may not have,” Cooper said.

Officials also wonder whether the program would contribute to a glut of open commercial and office space in Sioux Falls.

“Does it compound the problem?” Councilor Vernon Brown asked.

During the years a property receives tax breaks, the difference between what it pays and what it should have paid is spread among existing taxpayers, said Ken McFarland, administrative assistant to the Minnehaha County Commission.

“In other words,” Brown asked, “property owners would subsidize this tax break?”

“Basically,” McFarland responded.

I hope the city council is least smart enough to not let this proposal see the light of day at a council meeting. This proposal should be shot down before it even gets voted on – and councilor Jamison needs to excuse himself from the negotiations, because trust me, if he doesn’t he will find out what a real ethics complaint is.