I was initially hesitant to write a guest viewpoint supporting tax increment financing. TIF interferes with the natural order of things. I am not certain the state should be meddling in the death of a neighborhood by encouraging businesses to locate in areas where they would not otherwise build.
I doubt TIF's ability to help a truly desolate area, as opposed to places where the economic decline is less severe and more recent. To me, the state's definition of "blight" appears strained. But my concerns cannot be resolved by Belleville. TIF was created by the state, and can only be altered by the state.
Cities have always competed for projects. TIF has provided an additional weapon to areas like Belleville. Belleville ignoring TIF would be the equivalent of taking a knife to a gun fight. The car dealers would be in O'Fallon, Wal-Mart/Lowe's would be in the county or Shiloh, and Home Depot/Target would either not exist or be in the county. The city's coffers would be short about $3,000,000/year, and we'd be talking about firing 40+ police and firemen, not hiring them. Had just these three projects been defeated by TIF's detractors, their currently proposed $25 a year sewer tax increase would approach $200 a year for every sewer account in Belleville. These are the cold, hard facts that only the misinformed or dishonest dispute.
Further, not one of the above TIF districts was paid for by "our tax dollars" as some politicians crow. Belleville taxpayers only pay tax if they choose to patronize these businesses. They are self-sufficient, and all incentives they receive are generated by the annexed property. Moreover, when the agreed incentives expire, every dollar reverts to the city, making future revenue streams stronger.
Opponents attempt to characterize TIF as "handouts" to "Big Business," and absurdly attack the Eckert's Orchards' TIF. These attacks are political gamesmanship at its worst.
Eckert's obtained its own financing and rehabilitated its own facility. Eckert's qualified for a 1 percent special sales tax on its own sales, generated from some Belleville residents and tens of thousands of others, including many St. Louisans. Belleville rebates this tax and half the property tax to Eckert's up to $975,000, and, thereafter, keeps it all.
Belleville retained all the ordinary sales tax including increases due to Eckert's substantial investment. Eckert's could have increased prices 1 percent and forever kept all increased revenue for itself. Eckert's could have forgone costly rehab to worn structures and built new across the street (outside Belleville) or made one of its three other locations the signature facility that now exists in Belleville. The owners are local people, not a foreign corporation. You need only visit the new property to realize how profitable this destination is for the city.
Opposition to the recent Kroger incentives is also misplaced. These critics would rather let a giant, useless, empty tin barn indefinitely stand on an important street corner than to pay one-third of the cost to return the site to dirt. This isn't a handout. Kroger's could purchase a build-ready site in any other city in the area. The project is likely to return the incentive and become accretive to revenue within a few years.
Empty businesses have been a continuing concern in Belleville. Had the council bent to the shortsightedness of opponents, in a decade or so the city would be paying the entire $600K to demolish the building and forfeited all the sales and property tax generated in the interim.
Concerns voiced regarding the TIF funds' debt and balances also lack credibility. All of the TIFs are paying back faster than budgeted, and the city retains an A+ bond rating for that very reason. Further, the notion that Belleville residents are paying more in taxes because of TIF is a distortion. Without TIF, infrastructure improvements now paid with TIF dollars would be paid from the general fund. The city's assessment would include what is now collected for the general fund and what is obtained via TIF.
Belleville has expertly used TIF to sustain its current receipts and ensure future business revenue tax streams. If people don't like the advantage TIF has provided Belleville, their concerns are properly addressed to the state, not the city.
Thomas R. Peters, of Belleville, is a former alderman who chaired the Economic Development Committee. He currently is a public representative on the TIF review board.