Editorials

Why TIF stands for ‘Today’s Instant Funds’ and ‘This Is Flawed’

Belleville’s City Hall renovations will cost more and take longer than anticipated. That can happen in a 60-year-old building laced with asbestos.

But the thing that is a little harder to understand is the $2 million in cost overruns coming out of the tax increment financing District 3 account. City Hall is where you get a business permit, so is that why city leaders think it is OK to take $2 million from TIF 3?

By definition, TIF funds are intended to pay for infrastructure that will boost economic development and thus generate more tax revenue. It is pretty tortured logic that leads you to believe city building renovations will boost the local economy, making it worth hiking people’s property taxes and taking money from those school kids to build up those funds.

TIF 3 took $10.8 million in property taxes last year alone, and $171 million total since it was established in 1986. The city extended its 23-year lifespan until 2021, and Mayor Mark Eckert already said there needs to be a plan for replacing those dollars.

If the whole idea behind taking $171 million for a TIF was to boost economic activity for that big tax payoff by 2021, where’s the payoff? If something doesn’t work after 35 years, maybe it’s a bad idea?

But then, that was the conclusion the East-West Gateway Council of Governments came to a few years back when it extensively studied TIFs on both sides of the river. The districts don’t really create economic activity, but they do create bidding wars between communities.

Besides City Hall fixes, Belleville also used TIF money to buy police cars.

When Swansea village leaders wanted to use $170,000 in TIF funds to help buy a fire truck, the former mayor cried foul. He made the same argument, that a new fire truck had little to do with economic development. The village repaid the money.

If there are not clear legal restrictions on how municipalities use economic development funds, there ought to be. When elected leaders take money from people in property and sales taxes to bring new business to the city, you should spend the money on bringing new business to the city — not as a slush fund to conveniently handle the cash need of the moment.

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