To the editor:
The Telegram recently reported that our city administrator told our city council: taxpayers are never on the hook if a TIF project doesn’t go according to plan. This is untrue. In reality, tax increment financed debt immediately “hooks” taxpayers regardless of whether a project goes according to plan.
In 2001, the city authorized $4.5 million of TIF to enable the development of Village Centre Mall. During the 15 years that followed, schools were “forced” to give up their share of some $4.5 million in mall property taxes that went to pay for mall-related debt instead of education. Not surprisingly, during that same period, school requests for property taxes increased from $10 million to $22 million per year. If taxpayers weren’t “on the hook” for this increased cost, who was?
In addition, taxpayers will remain “on the hook” for years to come even though mall-related debts are now repaid and public schools are finally getting their regular share of mall property taxes. Why? Because, except for increased government spending, the future is uncertain. Retail today is sick. Over 5,000 stores have already closed this year. For example, JCPenney recently closed 130 stores nationwide including locations in Fremont, McCook, and North Platte. The owners of Columbus’ mall don’t have an “immunity idol” that guarantees their anchor tenant will “survive,” and government can’t guarantee taxpayers that property taxes paid by malls will not unexpectedly decline.
Also, where would public schools look to make up for the loss of tax revenue if the mall were destroyed by an unlikely tornado? Answer, taxpayers. While property owners have property insurance, schools don’t have insurance for the loss of the property tax revenue that would follow such a disaster. Consequently, schools would either do without, or everyone’s taxes would go up.
TIF was intended to restore run-down properties, not make taxpayers “bankers” for real estate investments that don’t make economic sense. As used today, TIF is the precise definition of “crony capitalism.”