Tax Increment Financing (TIF) and Sprawl

Transcription

1 Tax Increment Financing (TIF) and Sprawl Greg LeRoy Executive Director Good Jobs First Good Jobs First Conference May 7-8, Linthicum, Maryland

2 Definitions: TIF & Suburban Sprawl Tax Increment Financing (TIF) A diversion of the incremental future growth in property and/or sales and/or gross receipts tax revenue, in a specified TIF district, to pay for (re)development( costs in the district Originally enacted as a tool to reverse physical blight

3 Definitions: TIF & Suburban Sprawl Suburban Sprawl Causes spatial mismatch between job creation on the fringe and job seekers at the core Fringe worksites are inaccessible via public transit, denying central-city city workers job opportunities Forces all commuters to use cars, fueling global warming air pollution

4 The Thin Cities: How Subsidized Job Piracy Deepens Inequality in the Twin Cities Metro Area Good Jobs First December 2006

5 MAP 1: Subsidized Business Relocations 1999 to 2003

6 MAP 2: Subsidized Business Relocations Access to Public Transit Stops

7 MAP 3: Block Groups with Greater than Average Percentage of Non-White Residents

8 MAP 4: Block Groups with a Greater than Average Percentage of Residents Living in Poverty

9 MAP 5: Municipalities with a Less Than Average Percentage Change in Tax Capacity

10 TIF in Suburban St. Louis

11 TIF for Cabela s This Fort Worth Cabela s received a TIF subsidy worth $32 million

12 TIF for Huge Greenfield Projects Mesa del Sol Albuquerque, NM Map & Image of Village Center

13 TIF for Wal-Mart in an Orchard A similar Supercenter in Wisconsin received $2.2 million in TIF to build on a former apple orchard

14 What Went Wrong? Three historical trends converged to pervert TIF: Long-term cutbacks in federal aid to cities Court decisions giving localities wide latitude Fiscalization of land use a.k.a. cash register-chasing chasing caused by tax revolts like Prop 13

15 Anatomy of TIF s Perversion Results: TIF strays from original anti-blight mission into newly developing areas Developers use TIF aggressively to offset high land costs in wealthy suburbs (e.g., Missouri) In New Mexico, TIF is expanded to include even the state increment of Gross Receipts Tax

16 TIF Policy Recommendations #1: Back to Basics Restrict TIF to public goods in already developed areas that really need help. Measured by specific, measurable criteria such as: concentrated poverty business closings tax base decline

17 TIF Policy Recommendations #2: Location Efficiency In urbanized areas with public transit systems, restrict TIF to project sites served by regular transit service Building on innovations in Illinois, California, and Maryland

18 TIF Policy Recommendations #3: Reduce Retail Eligibility Strictly curtail retail eligibility for TIF to transit-accessible accessible projects and; Only in neighborhoods that clearly lack basic retail amenities Such as groceries, medicine, and clothing

19 TIF Policy Recommendations #4: Install Fiscal Safeguards Cap share of assessed value and/ or sales tax revenue that can be TIFed Use pay as you go when possible Install trigger system to take the foot off the pedal when private reinvestment returns

20 TIF Publications on Our Website TIF, Greenfields & Sprawl The Thin Cities Straying from Good Intentions Another Way Sprawl Happens Protecting Public Education from Tax Giveaways to Corporations Chapter 6, The Great American Jobs Scam

21 Sign Up for Our E-List E to Get Study Announcements and Other News Greg LeRoy Executive Director Good Jobs First goodjobs@goodjobsfirst.org x 211