Sneaky, huh?

This comes from a paper titled Why Tax Increment Financing Often Fails and How Communities Can Do Better published by the Lincoln Institute of Land Policy:

In addition, TIF can make cities’ financial decisions less transparent by separating them from the normal budget process. In Chicago, for example, $660 million — nearly a third of the city’s property taxes — go to TIF districts, making public scrutiny of these funds more difficult and preventing elected officials from re-prioritizing the spending. Finally, TIF carries the same risks as other types of business tax incentives, which can lead to inter-city competition and short-term decision-making.

Could it be that the real purpose of the TIF push here in El Paso is to take tax money out of the hands of city council and give it to others?

You can read the entire report here: https://www.lincolninst.edu/publications/articles/new-report.

We deserve better

Brutus

6 Responses to Sneaky, huh?

  1. Anonymous says:

    EP has a few wealthy neighborhoods and a lot of poor neighborhoods. When you reserve the money from a new neighborhood ( which normally will have higher property values) it makes it more difficult to meet the needs elsewhere. But I do understand it. I live in the Willows. The six homeowners on my cul-de-sac collectively pay over $60k annually in property taxes and the HOAs in the Willows completely cover the costs of the Lake, water and maintenance of the medians, the streetlights and associated utilities. So, properties in this area cost the city less (and there are several hundred houses that also pay $8-12k each in property taxes among four associations that are doing this so there is a ton of tax revenue generated). That said, the street in my cul-de-sac (the one freaking thing the city is supposed to maintain) has so many cracks, grass is starting to grow. So, I can understand why some areas want to keep the tax money in their neighborhoods. I don’t think that works well in a city with this low a median income but it is fairer to developments paying large amounts of taxes that otherwise get ignored by the city. All that said, the HOA model used by the Willows (HOA dues maintaining common areas, utilities and amenities) was designed to reduce the cost burden of neighborhood amenities on cities. Our city seems to be moving in the opposite direction and ignoring older neighborhoods that are paying more than their fair share of taxes and costs.

    Liked by 1 person

  2. JerryK says:

    There is a natural tension in urban dynamics to reallocate funds from the core to the edges where there is growth. Money spent in the core on infrastructure just maintains what is already there. Money spent (or incented) on the edges for infrastructure is met with new property value, i.e., a dollar of spending generates a multiple in property value. Meanwhile, the core deteriorates unless it has sufficient political clout to turn this around.

    This dynamic plays out in the political life of every city. It is the argument over who benefits from growth and who pays for it.

    Like

    • Anonymous says:

      That said a TIF locks money into the perimeter new development, while no segregation of money still allows for debate on how it gets spent.

      Like

  3. Anonymous says:

    Well when the Governor, the State passes a LAW that cuts Property Taxes, allows the , TAXPAYERS to control these taxes, then we should know that within hours, days the politico crooks in El Taxo will come up with a way to avoid the LAW, ignore the laws, find a way around their taxing ability. Fabricated, inflated , manufactured Property “Values” in El Taxo. Tax, waste, spend, tax more.

    Liked by 1 person

  4. Anonymous says:

    All of the specialty taxing implementations of municipal government are designed to sidestep typical regulation of taxing authority. The TIRZ districts that the City of El Paso are so fond of are just this type of manipulation.

    Look for ever more creative use of taxation by the City of El Paso as accrued debt mounts and interest payments become the bulk of general fund expenditure.

    It is simple math, if you spend more than you take in then eventually your debt will far surpass your income, and your interest payments will eclipse what you can spend to live on.

    The City of El Paso has proven time and again that they are incapable of convincing companies to come here and hire people. The only exceptions to this are companies who have received ridiculous tax concessions to the point that their investments are meaningless in the area’s economic structure.

    If you cannot increase the amount of money you make yet you keep overspending there is only one logical result: eventual economic collapse.

    The only unknown factor here is that we don’t know the exact timeline before the City of El Paso will be bankrupt, but probably within 5 years of building the proposed arena and completing the quality of life “improvements” whose costs are still inflating far beyond what was originally voted on.

    Liked by 2 people

  5. Simple says:

    TIF is really simple. It is preferential treatment for a select group of people and special interests. It is very consistent with El Paso’s philosophy of government.

    Liked by 1 person

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