It should be no surprise that in Jodi’s weekly column she is (gently) ringing the benefits of TIFs;
The projects that can be created here also likely won’t happen without some cooperation between the public and private sectors – whether it’s in the form of land sales, tax increment financing or use of sales tax revenue to enhance the riverfront. Maybe all of the above. And I believe as a community we need to be open to those partnerships because these are opportunities. Not guarantees.
As we know, Jodi makes her living with content marketing and advertising. Her clients would wonder what was going on if she wasn’t encouraging their ideas. She gets a pass on this one (in an otherwise great article).
Many people wonder why I am so against TIFs or other tax incentives for developers. Mostly because of the research I read on the topic. I have read studies from the East Coast, the South and the Midwest (Kansas and Iowa). Most come back with the same results, TIFs don’t pay for themselves in economic impact (jobs, etc.) Most of the studies have shown that TIFs usually have either a very small return or NO return at all.
It is important to know that in order for TIFs to be considered good for the local economy it has to have an impact on the regular Joe. When we give tax rebates and incentives to the ‘Big Guys’ those ‘unpaid’ taxes get spread around to the rest of us. In an essence we are propping up these developments in hopes of a payoff that may never come. It would be like the bank forcing your neighbor to pay your mortgage if you defaulted.
What we have seen in Sioux Falls is quite the opposite. Our property tax (rates) have continued to climb due to growth (crime/drugs, public education, infrastructure). This isn’t some study I have done, it’s just reality.
I have often chided the powers of be to provide a comprehensive TIF study actually showing us the benefits of TIFs in the Sioux Falls area. Some have even suggested to me that some of those studies have been done privately but haven’t been shared with the public for obvious reasons, dismal results.
Just because you ‘SAY’ something works, isn’t enough, you have to back it up with real data. I think the THRIVE report last year was the closest glimpse we have had that has shown our massive growth in Sioux Falls is having an opposite affect on the populous, higher taxes and the plague of low wages in South Dakota.
TIFs haven’t relieved us of our ills, one might argue that they have actually made things worse (I’m not at that point yet).
I have often said we need to revamp tax incentives in Sioux Falls by having a strategic plan to clean up our core neighborhoods from the streets up. This would have an immediate and direct impact on the people living and working in Sioux Falls and it would make our city a better place to live, which improves quality of life and helps to attract a solid workforce.
Until someone can prove me otherwise with actual data, TIFs will always be just corporate welfare to me, and little else.