Your Opinion: ‘Sneaky’ TIF sought for Capital Mall
Friday, October 25, 2013
I would like to shine a flashlight of public inspection into the Capital Mall TIF. Let’s poke our light around inside this black box and try to understand what’s inside.
The Farmer Company which recently bought the Capital Mall has applied for and in all likelihood will get something called Tax Increment Financing. A TIF is in effect a legal but sneaky way to escape paying property taxes on any improvements to a property for 23 years. The money they save on property taxes is then put into an account they can draw from to fix the joint up. The TIF is premised on the mall area being blighted. This is of course simply not true. Capital Mall is not blighted it just needs a better business plan. But this is the system the law allows to get the TIF money and thus avoid taxes the rest of us have to pay when we make property improvements.
Why is a TIF a bad deal for taxpayers? Because the taxpayers never get back all of the property tax money rebated to the developers but the developer gets to keep the higher profits when they rent mall space at a higher price than they get now. The city will never recoup the tax money it gave away. They are also asking the city to allow them to charge an extra 1 percent sales tax for 40 years which they also get to keep. This is not so bad because we can shop elsewhere if we don’t like sales taxes. We can vote with our feet.
What outrages me is that our City Council saw fit to tell taxpayers about this with a tiny little ad in the legal section of the NT. In a more honest society there would have been some explanation of this matter. The local news media including the News Tribune was strangely silent on the matter. News media including newspapers have a duty to report on deals like this. They failed to do so. Were they pressured by advertisers to stay silent?
Just remember, fellow taxpayers, that the next time your property taxes increase, you can thank the businesses that got tax breaks like this one. This is how the privileged class gets richer and the middle class foots the bill. Whenever I am in City Hall I can smell the stench of the under the table deals and special favors for the rich and well connected.
There is a public hearing on Oct. 28 at 5:30 p.m. Citizens who care about the rot that characterizes out city government should be there. We at least need to let the City Council know that we are watching them.