Rapid City's Tax Increment Finance District Project Review Committee has voted 3-1 to deny a nearly $4 million TIF for a second Wal-Mart Supercenter. Read the Journal's story here.
With no clear end in sight for the economic downturn, the decision appears to have some merit. One need only look at the numerous empty retail spaces in Rapid City to come to the conclusion that betting on future retail sales tax revenue is, at least for now, a sucker's bet.
5 comments:
Perhaps I am obtuse, but I really don't get what is bad about TIF. There is an undeveloped piece of property on which the taxes are X. Somebody develops it, and while doing so is usually required to build infrastructure which will benefit future development and which otherwise would be the City's responsibility. So the taxes remain X for a few more years and then go up to be based on the value of the property. It's only a bad deal if we know that the property would be developed by somebody without a TIF. The problem, it seems to me, arises when there is a lack of consistency as to who gets a TIF and who doesn't.
The strip mall between Kohls and Petsmart has sat vacant for over three years. The new building across the street from Runnings is half-full.
These properties use TIF money. There was and continues to be no demand for these properties.
Save the taxpayers money and end the TIF scam.
You can bet Walmart isn't going to be vacant, Thad.
Wayne, for the most part, I agree with you. But the way TIFs are "sold" to the public is by telling them that the difference (increment) will be made up in additional sales tax revenue.
That hasn't happened with recent TIFs. Development hasn't taken place as was promised on the Cabela's TIF for example.
In a good and growing economy, a TIF can be a great thing. In a slow economy, it can be very risky.
Neal,
It's not about whether Wal-Mart will be vacant. We all know that won't happen. But the other properties surrounding Wal-Mart and included in the TIF district are another matter entirely. Thad's examples are good examples of the taxpayers footing the bill to bring utilities,etc. to sites that are not contributing back.
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