Issues: Tax Increment Financing
I will hold a hard line on questionable TIF schemes and on creating new TIF districts without a comprehensive growth plan. Why?
In 1997 the per-person value of money tied up in TIF’s in Clinton County was $527. In 2006 that number was, $1,497.ISU Dept. of Economics Paper That is a growth of over 280% in nine years. TIF’s were designed to help redevelop urban neighborhoods and attract new businesses. Increasingly they are being used to fund street and road projects and private housing developments.
Our overreliance on TIF financing is growing very close to putting us in a position that if we get a large potential employer seeking to locate in Clinton we might not be able to offer a package of incentives that they would normally expect because we have frittered it away.
What we are seeing more and more of is that developers and business people come to the city with a business plan that incorporates TIF ahead of time as part of the profitability calculation. This is like me going to the bank and saying: I have this great business plan but unless you give me an interest free loan, it will never make money.
A TIF should be an incentive that does one of two things:
- Offers an extra incentive for a large employer to move here by making us more competitive compared to other locations.
- Offers just that extra bit of help to encourage someone to build or locate a business in an area where the city needs and wants development but which is not quite as economically viable as a green field development.
We need to assess new TIF financing requests by those criteria. Is it creating a a lot of good paying jobs? Is it helping us redevelop our city core?
I am very impressed by the way that local business people have worked with the City on the development projects in and around the Wild Rose project. Steve Howes and Dan Jefferies have made personal monetary guarantees on the city’s investment. That is the kind of risk-sharing and private-public cooperation that I want to see more of in our future development. If Clinton is going to grow, it needs partners in risk, not recipients of corporate welfare.