12 Year Incumbent's intent to implement Tax Incremental Finance
"In Logan County, the Board of County Commissioners are taking the first steps to create a TIF District. This could be a tool that can help in meeting new development infrastructure needs. ... As we work our way through this first attempt to form a TIF, I hope we can learn from it and make it a tool for the future in all parts of the county."
http://guthrienewspage.wordpress.com/2014/03/02/tax-increment-finance-district-tif-planned-for-logan-county/
http://guthrienewspage.wordpress.com/2014/03/02/tax-increment-finance-district-tif-planned-for-logan-county/
Tax Incremental Finance -- a political gateway drug to cronyism
As a small business owner I couldn't imagine asking my fellow taxpaying citizens to allow County property tax money be diverted to help me financially with my business venture. But that is exactly what Tax Increment Financing (TIF) does and mostly for big business. TIF allows a local government agency to reimburse developers for some of the project’s costs, such as extension of development infrastructure (sewer/water/gas/electric/roads/culverts/curbs/flood control). Our Logan County Commissioners intend to implement this process at the I35 & Hwy 33 interchange very soon to help a major retail gas and sundry station move from one side of I35 to the other.
There is little to no accountability at the county level and even if the TIF commission that is supposed to review and govern the process rejects a proposal, the county commissioners can override that determination and go ahead with the project anyway. TIF is effectively used to bypass county bond elections for approving a public project or creating a special district. It allows the County Commissioners to take on debt without the required proposal and subsequent approval of new debt by the citizens. Even though TIF is opposed by the Oklahoma Republican Party this isn't a Republican versus Democrat argument. It is about those who are for following the spirit of a law or program, verses those who would justify a perversion of the law with the all too expected situational ethics response of the ends justify the means.
Property taxes that normally would be paid by a developer are diverted to develop the project. At the time the TIF district is created, the property taxes generated by that area become the base taxes, and those taxes will continue to fund schools and other services for the lifetime of the district. But then the County Assessor comes in and assesses the TIF property as developed and raises the ad valorem (property) tax to correspond with developed property. From that day forward, any increases, or increment, in taxes—whether from new development or from the increased value of existing land and developments—are retained by the local urban-renewal agency for redevelopment. A bond is purchased and the money is used for the project and paid off with what would normally have been property taxes. In effect, property taxes that normally would have to be paid by the developer to the district are instead diverted to the urban-renewal agency for their exclusive use.
An Iowa study of TIF usage concluded that, “On net . . . there is no evidence of economy-wide benefits, fiscal benefits, or population gains.” Another study from Illinois found that economic growth in cities that did not use TIF was stronger than in cities that did, because TIF subsidies caused an inefficient allocation of resources. In Liberty, Mo., earlier this year, the superintendent and school board were forced to campaign (unsuccessfully) for a tax increase that they said was necessary due to the harms that heavy use of TIF caused in that community. After over 60 years of use & misuse the state of California outlawed their use. The State was sued by multiple government established urban-renewal agencies that it created and the California Supreme Court upheld the State’s decision to make them illegal in CA.
Oklahoma Republican Party Platform Adopted 4/20/2013 Page 12
http://www.okgop.com/wp-content/uploads/2013/07/2013-Platform_Final-form.pdf
B. Economic Development
1. We believe that Oklahoma’s efforts to attract industry should be grounded upon the establishment of a favorable and friendly economic climate rather than upon tax and other governmental subsidies to individual businesses.
6. Because “TIF” Districts only create taxes to fund collaborative public-private real estate investments, we support abolition of Tax Increment Financing district laws.
Marven Goodman
Candidate for Logan County Commissioner
There is little to no accountability at the county level and even if the TIF commission that is supposed to review and govern the process rejects a proposal, the county commissioners can override that determination and go ahead with the project anyway. TIF is effectively used to bypass county bond elections for approving a public project or creating a special district. It allows the County Commissioners to take on debt without the required proposal and subsequent approval of new debt by the citizens. Even though TIF is opposed by the Oklahoma Republican Party this isn't a Republican versus Democrat argument. It is about those who are for following the spirit of a law or program, verses those who would justify a perversion of the law with the all too expected situational ethics response of the ends justify the means.
Property taxes that normally would be paid by a developer are diverted to develop the project. At the time the TIF district is created, the property taxes generated by that area become the base taxes, and those taxes will continue to fund schools and other services for the lifetime of the district. But then the County Assessor comes in and assesses the TIF property as developed and raises the ad valorem (property) tax to correspond with developed property. From that day forward, any increases, or increment, in taxes—whether from new development or from the increased value of existing land and developments—are retained by the local urban-renewal agency for redevelopment. A bond is purchased and the money is used for the project and paid off with what would normally have been property taxes. In effect, property taxes that normally would have to be paid by the developer to the district are instead diverted to the urban-renewal agency for their exclusive use.
An Iowa study of TIF usage concluded that, “On net . . . there is no evidence of economy-wide benefits, fiscal benefits, or population gains.” Another study from Illinois found that economic growth in cities that did not use TIF was stronger than in cities that did, because TIF subsidies caused an inefficient allocation of resources. In Liberty, Mo., earlier this year, the superintendent and school board were forced to campaign (unsuccessfully) for a tax increase that they said was necessary due to the harms that heavy use of TIF caused in that community. After over 60 years of use & misuse the state of California outlawed their use. The State was sued by multiple government established urban-renewal agencies that it created and the California Supreme Court upheld the State’s decision to make them illegal in CA.
Oklahoma Republican Party Platform Adopted 4/20/2013 Page 12
http://www.okgop.com/wp-content/uploads/2013/07/2013-Platform_Final-form.pdf
B. Economic Development
1. We believe that Oklahoma’s efforts to attract industry should be grounded upon the establishment of a favorable and friendly economic climate rather than upon tax and other governmental subsidies to individual businesses.
6. Because “TIF” Districts only create taxes to fund collaborative public-private real estate investments, we support abolition of Tax Increment Financing district laws.
Marven Goodman
Candidate for Logan County Commissioner