Accountability for Taxpayer Money is a public interest advocacy group that has studied tax incentives and government transparency for the past nine years.
ATM examined the recent financial disclosures filed by mayoral candidates. We focused on contributions of $1,000 or more made by members of the “development community,” meaning individuals, companies or PACs involved in development or real estate. Here is what we found:
Wade Hinton - $4,550 (f5 contributions)
Tim Kelly - $31,500 (24 contributions)
Kim White - $131,700 (102 contributions)
Developers, like all citizens, support candidates for a variety of reasons. Contributions from developers warrant scrutiny because they, unlike the rest of us, may plan to request a tax incentive from the city, such as a payment-in-lieu-of tax abatement or tax increment financing.
In any city with a strong mayor form of government like Chattanooga has, businesses often focus their lobbying efforts on one individual, the mayor.
In the latest disclosures, 44 individuals connected to past PILOTs and TIFs have made contributions. Four were to Wade Hinton ($3,550); two to Tim Kelly ($600), and 38 to Kim White ($36,700).
Two mayoral candidates played important roles in previous tax incentives. As city attorney, Mr. Hinton reviewed TIF and PILOT agreements. Ms. White, as head of River City, managed the downtown housing PILOT program.
During the new mayor’s first term, the city may be asked to provide taxpayer assistance for redevelopment at the former foundry site, the former Alstom site, and a new baseball stadium. Sixteen individuals or corporations associated with these riverfront properties have contributed a total of $21,850 in the mayor's race, all to Ms. White.
Tax incentives are not inherently bad. We need them in our toolbox. We also need a mayor who could and would say “no" to some requests and would be an advocate for policies to protect all taxpayers and neighborhoods in agreements that are approved.
Hamilton County leads the state in the amount of property tax abated through the payment-in-lieu-of-tax program.
The $25 million the city and county does not collect annually is revenue that is not available for high priority community needs like public safety, workforce development, affordable housing, parks, streets and other infrastructure.
Chattanoogans need to elect a mayor who will propose written policies to help ensure that all future tax break agreements provide significant public benefit; meet the "but/for" test; represent the minimum necessary in terms of amount and duration, and contain strong clawback language if the company does not meet its commitments.
Elections matter.
Helen Burns Sharp, Founder
Accountability for Taxpayer Money-Chattanooga
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Thank you, Helen. As always, you bring relevant information to the table and are steadfast in your commitment to defending the best use of our taxpayer dollars. We are thankful to you for all of the years that you have devoted to continue to press for written policies and procedures that should guide our future decisions regarding TIFs and PILOTs. Our city has given away far too many tax breaks that were not necessary and we, the taxpaying citizens, are left holding the tax bill.
I live in the city but not downtown. Over the years, I have become disappointed, frustrated and finally exasperated by the unfair and disproportionate spending of our tax dollars on downtown projects. This includes not only direct tax dollars for parks, sculptures, riverfront development, festivals, etc. but also for developer tax breaks for building condos, apartments, street extensions, etc.
Many years ago, our leadership argued that these expenditures were necessary to transform our city from a smog-infested stagnant town into a vibrant up-and-coming metropolitan destination. And they were right. However, as we reached our revitalization goals and became one of the most sought-after cities in the South, we continued to "give away the farm" in the form of developer incentives that were no longer necessary. Developers want to come to Chattanooga; we don't have to pay them to come anymore.
The end result of continuing to pay developers to invest in downtown is that there is less money for even the most basic infrastructure (roads) in all of the other parts of the city - never mind niceties like parks or art. Those of us living in other parts of the city (the actual majority of citizens) have been neglected for years. Our new mayor needs to address the disparity in preference towards downtown and recognize those of us who have been the continued funding source for all things "downtown" at the expense of our own needs. We need him or her to establish policies and procedures regarding TIFs and PILOTs so that we stop giving away so many precious tax dollars that can be better used for the community as a whole.
By looking at the list of donors to potential mayoral candidates in this race, I think we may have a good idea as to who may or may not be the best choice.
Lynn Ashton