TIFs

Stop the Opt Out

Local group is circulating this petition, I signed it today;

The Sioux Falls School Board just voted to approve ANOTHER opt out – this time to the tune of $2.1M for 10 years. The opt-out will allow the school district to raise additional funds beyond what they get in their existing tax levy and state aid, by collecting taxes from property owners in the district. SD Law allows citizens to bring this to a vote of the people (rather than a board of five unilaterally making the decision for all of Sioux Falls residents.) Deadline is July 17th. We will be circulating petitions to bring the opt-out to a public vote. This group will be for sharing information and locations to sign a petition (if you are a registered voter in the Sioux Falls School District) or if you would like to circulate a petition (have to be a registered voter in the State of South Dakota) you can find out more information for events/opportunities to volunteer at.

You know my feelings on this, stop handing out TIFs like candy and our opt outs would go away.

Anonymous Legislator drops the bomb on property taxes and developer greed

Not sure ‘who’ this legislator is, but they apparently were in the legislature for at least 14 years, they left the comment on a thread on that ‘other’ blog. Notice the trashing of TIFs, they are absolutely right, they are driving up our taxes;

A few comments on property tax and what needs to be done to accommodate meaningful and responsible legislation to address the issue.

First of all the problem was created at the local level in the name of economic development by local officials and developers. The locals wanted tools in their “economic development tool box” and the legislature always pandered to their wants. In addition developers no longer want investors to in their vocabulary, They want that investment to come from the taxpayer.

This is a complex issue and cannot be resolved in 1 legislative session, but it must be done. I saw this issue become out of control during my 14 years on the tax committee when I was in the legislature, and it has only become worse over the past 10 years.

I believe that to address this issue some concessions must be made now, they include but are not limited to:
1. Put a moratorium on the creation and limit the use of TIFD’s, by local governing bodies beginning immediately. These things have proliferated and one is never paid off before several more are initiated. 12 to 20 active TIFD’s in any local government is profound abuse.
2. Put a moratorium on the creation and/or use of any further discretionary tax formulas. These can also be used in a TIFD and that provision needs to explicitly deny that.
3. Put a moratorium on the creation of any additional subdivision taxing districts within local government.
4. Prohibit the creation of any new political/public subdivisions by the legislature.
5. Restrict/prohibit any new “opt outs” and freeze those already in place from renewing or or expanding those opt outs.
6. Freeze levies for a period for those subdivisions already in existence, except if they should choose to lower the existing levy.
7. Freeze all specials and road tax on real estate at current levels, unless it is a reduction.
8. Reduce bonding authority levels of all local governing bodies.
9. Further restrict growth in local governing bodies budgets.
10. Restrict the BBB tax, BID tax, and city sales tax to current levels, and prohibit the use the use of these taxes to only the general fund with an obligation to reduce property tax. It has become increasingly evident that these dollars are being used as a cash payout to developers with little or no regard for the taxpayer. Restrict BID boards and all other political subdivisions from giving tax revenue to any other body with taxing authority.
11. Require local governing bodies who have acquired real estate to get at minimum the price they paid for the property, rather than just a fraction of what they paid for it.
12. Prohibit any non-profit with taxing authority from asking for any local governing body for contributions outside of their tax base.
This certainly is not a complete list, but it is a beginning. I firmly believe many of these things need to be done for accountability at the local level. I blame the legislature for many of the problems associated to property tax increases. Most off the issues prevalent today are caused by the term “economic development”, in an effort to lower taxes. It doesn’t work, never has worked, and will never work. Countless studies have indicated, time and again, that these issues cause an increase in taxation rather than a reduction.

Furthermore these thing are being abused by the affluent, developers, “non profits”, and the unknowing and uninformed (local elected officials), all at the expense of the local taxpayers,
and that is a fact. Local property taxpayers are being lead to slaughter in the name of corporate welfare, and it needs to stop. If a developer thinks he/she has a valid idea he/they should have no problem finding investors to support the idea without the taxpayers investment which, is a liability on them and never produces a dividend.

I know this will be a hard sell as developers and the unknowing locals will fight it with a vengeance. It has become apparent locally that elected officials don’t run the show, they are kept in the dark and fed sh_t like a mushroom.

Ask some hard questions of local officials about current activities in your area. They refuse to answer, skirt the issue, or lie. I have investigated and found the answers and the truth. Documentation is damning.

To provide adequate property tax relief requires doing a responsible study as to the real problems associated with it. To get a responsible study all of the issue listed previously must be considered, and that cannot be done responsibly during a short legislative session.

Initiating some or all of the previous stated issues can go a long way to improve a comprehensive study and reduce inflated values and property taxes. I understand the legislature did not cause the problem entirely, but they did enhance it and became enablers for the local governing bodies, who do not responsibly use the tools given to them. I know they asked for it, but like a child who doesn’t understand, sometimes you must take away their gift until they can totally understand the ramifications of improper use.

Municipalities are allowed a sales tax. The purpose behind that was to supplement their general fund budget. Not to use as grants to developers for millions of dollars.

There is a lot going on, misuse of those dollars needs to be cornered, if it is not it will only become worse for the taxpayer.

No new taxes would be necessary if local governments were made to be responsible.

Instead of Op-outs maybe we need to make TIFS harder to get

Ever since the State Morons in Pierre changed the rules for TIFs (can be for economic development now) They have exploded. I suggest that we limit them to severely damaged lands and low-income housing. The school district just did ANOTHER opt-out, and lied to the public about our taxes increasing. A foot soldier left this comment about the opt-out on Turdbook;

As regular taxpayers are asked to fish into their pockets for $2.1 million of additional money, each year for the next 10 years, be reminded that just for the TIF package given to the developers of The Steel District, the Sioux Falls School District will forego (aka not collect) $1.05 million in real estate tax revenue from those parcels in 2026. For the TIF package given to the developer of Cherapa II, the Sioux Falls School District will forego nearly $1.2 million of real estate tax revenue from those parcels in 2026.

In other words if we started eliminating TIFs and close out the current ones our taxes would actually go down. Did you know that 80% of property taxes paid in the school district and city are from single-family owner occupied homes. So yes, we are paying for these TIFs. And for what? A parking ramp? Public art? Tequila Bar? Seriously! If we eliminated ALL the TIFs we have on the books now the school district would take in MILLIONS in revenue from the big commercial developments. Why are homeowners asked to pay the majority of taxes in Sioux Falls? It should be a 50/50 split between homeowners and commercial property. TIFs never have much of a ROI, studies for decades across the US have shown they don’t stimulate growth and produce very few jobs except when being built. TIFs are a boondoggle and the average Joe is taking it in the shorts. In memoriam of a certain developer who passed recently, the council should make steps to eliminate TIFs from our city, once and for all.

UPDATE: What’s going on with promised Apartment Complex behind 8th and Railroad?

Last Tuesday the City Council got a presentation on RFP’s vs. Negotiated Sale. The topic came up because a negotiated sale is what the city is apparently still in the process of negotiating with the developer, Christensen, for the proposed development behind 8th and Railroad. I find this a little alarming. Back in June of last year the council got a presentation on the development. The developer told the council then that they planned to break ground in the Fall of last year or Spring of this year, now the planning department says it is is still in the ‘negotiating stage’. How can you be in the negotiating stage when the Planning Commission approved the TIF last July? Now there was a statement made by the proposed developer in June when they made their initial presentation; they said they would coordinate their build out with how fast the properties at the Steel District and more specifically Cherapa II would lease out. One wonders if those properties are having trouble being leased, and coincidentally slowing investment in the Christensen development? But we know how these games are being played in town. Years ago a franchise motorcycle repair shop tried to come to town and a major competitor with their wrench in city government convinced banks and other investors to back away from this franchise essentially shutting them down before the doors even opened. Funny how a TIF gets approved before a land purchase is even signed. We got some real clowns running the city these days . . .

SPEAKING OF A CIRCUS

There has been a lot of talk lately between constituents about how light and meaningless the city council agenda has been lately. The story is the lame duck mayor is telling council no new policy initiatives will be allowed on the agenda. I told someone, “The only reason you would shut down the only function of your policy body is because you have someone bigger then you riding your ass.” More to come on this.

UPDATE: Mike Zitterich sent me this;

I wanted to see how many ordinances and resolutions that get posted to the City Council Agenda by the mayor or city councilors, and in 2024, here is what I came up with: 

Out of 354 Ordinances/Resolutions sponsored from January 1, 2024 to December 30, 2024 — 

Mayor………………………….183……52%……………………5.1 Per meeting

Private Applicants…………..97……27%……………………2.7 Per meeting

City Councilors………………74……21%……………………2.1 Per meeting

36 Meetings in 2024 

HIGH: 

Mayor sponsored 13 total on August 13, 2024 

City Council sponsored 9 twice on May 14th and May 7th of 2024 

Private Applicants sponsored 8 total 3 times during the 2024 season.

Fargo rejects TIF for expensive condos

Finally a body of government has figured out TIF’s are a joke and just a handout to developers;

The Cass County Commission on Wednesday, July 5, rejected a developer’s request for public funding to finance the redevelopment of a property near Island Park, a financial boost that was already approved by the Fargo City Commission just last week.

The Fargo City Commission actually approved the TIF with only one dissenter, and he was doozy;

The project itself is a fine idea, Strand said, but he questioned if the city should be financially supporting it.

“I just don’t know if it’s our job as a city to partner to do that,” Strand said. “I just don’t know that’s our role, or what we should be doing… there’s lots of folks buying properties, remodeling and demolishing, but they don’t always come to us to have a 300,000 dollar investment in that.

Unlike Sioux Falls where the counties and school board just rubberstamp the city’s TIF proposals, Cass County said, NO WAY!

Strand is correct, it is NOT the responsibility of taxpayers to help fund condos. Maybe Sioux Falls needs to learn this. Just a few years ago we gave out over $50 million in TIF’s for attached parking garages to condos. While the developers are seeing millions in tax breaks and benefits there is very little ROI for taxpayers.

I actually wouldn’t be against TIFs if they helped with affordable housing and were much shorter;

“Coming at this with $300,000 (taxpayer) dollars for five units, the math for me is not even close to working,” Peterson said, adding he’d support a cheaper, five year TIF for the project.

That is what often cracks me up about TIFs, they last so long there really isn’t an ROI for taxpayers. By the time the TIF expires the property has probably changed hands a few times and the developers of the project are laughing all the way to the bank.