TIFs (Tax Incremental Financing) were created to allow cities to do projects they cannot afford. A TIF project also allows various private construction costs to be subsidized by sequestered future property taxes that normally would go into the general fund for running a city. It’s credit card spending with a new fancy name. Politicians love it because it sounds good, but they clearly don’t understand it, because they see a TIF as money from nothing with few down sides.
How good does this sound? While the taxes for TIF designated land are saved for a special project, regular taxpayers pay for routine city services incurred by the property having taxes diverted for years (and years) to pay to build the special TIF project.
If you are confused by this nonsense, join the club. Most scams work because they sound great and have great deceptive marketing.
You might ask yourself, who could create a PR scam like this? I am fibbing a little bit to call it a scam, because technically if the state Senate and House of Representatives pass a poorly written state law making such treachery legal, it is not a common scam. It’s the legal scam we all know as bad government on parade. The original intent was to fight city blight, but it’s being used to line the pockets of private developers and investors for everything but blight.
What is this latest proposed downtown TIF project? City officials whine out loud that it’s a street remodel that has languished undone for 20 years. Be honest. How many of you taxpayers lay awake at night dreaming about getting another remodeled piece of real estate downtown leading to a bike trail? You can dress this TIF up, put lipstick on it and accessorize it with a silk purse, but it remains a project no sane group of adult citizens has requested.
Property taxes were raised recently. The argument was city officials needed us to pay them more money so they could care for us. So, taxpayers are now paying more for the same terrible roads, a high murder rate and under-funded fire and police pension plans. Since our basic needs still continue underfunded and unmet, why would now be the perfect time for the City Council to approve a multi-million-dollar project to facilitate another downtown Chattanooga bike trail and sequester years of future taxes (totaling millions of dollars) to subsidize private developers and investors? It’s a run-on sentence that begs for an answer. How much public charity can taxpayers afford and why are our state representatives allowing bizarre TIFs to continue unchecked?
Beware anytime you hear these words...This is a great city investment that will bring in future tax revenue when the project is complete. Let us not forget the last Chattanooga TIF hatched between city officials, developers and hedge fund investors. The city borrowed millions to pay developers to build a new dead end road (plus infrastructure) to service a “yet to be built” private luxury housing development. That pristine TIF land contained no blight. That shell game had city officials issuing bonds that could only be bought by hedge fund owners. Some of the hedge fund folks were also investors in the proposed development. The deal was so rotten it resulted in (among other things) a lawsuit against the city, which the city rightfully lost. Why do politicians enjoy playing games near red hot stoves? Answer: because only taxpayers get burned when they do.
Take time to read other TIF articles. There are especially informative ones written by Helen Burns Sharp. On this TIF, Ms. Helen Sharp is once again trying to save taxpayers from being pushed headfirst into another shallow concrete pool. This woman needs our undying support and thanks.
Pay attention taxpayers. Watch for the officials who vote to approve this new TIF, so you will know who to thank for the next city tax increase.