TIF Fallacy #1: "Transferring tax money for private development is just being "business friendly."
Commissioners and Council members and board members have and will continue to justify transferring taxes collected as County, City, School District 11 and Pikes Peak Library District taxes for private development by stating that the practice of using “tax increment financing” is just being “business friendly.”
First of all, make no mistake: “tax increment financing” or TIF is not just some tax incentive. Under a TIF agreement, all new taxes--in most cases for 25 years (if not permanently)--are collected by the taxing entity. However, instead of the taxes collected from citizens, businesses and property owners going to the taxing entity to fund those things you’d expect them to fund (like the Sheriff’s Office in the County; the CSPF, CSFD, roads and stormwater in the City; school building infrastructure upkeep and hiring teachers for D11; buying books and providing library services for the PPLD), the collected taxes are transferred to the Urban Renewal Authority (URA). The URA’s appointed, unaccountable-to-citizens board will then, in meetings that are not video recorded, transfer those dollars to private developers to assist them in building private development. While the practice is extremely “friendly” to one particular “business,” the practice of transferring tax dollars to one government-favored business over another is anything but being “business friendly.”
Free market capitalism is based on free market competition. It is difficult to fathom how a non-favored business not receiving tens of millions in direct assistance from taxpayers could possibly compete with one who doesn’t. Incredibly, one county commissioner acknowledged the issue, but wrote if off by stating the competing businesses may be getting some kind of other help—“they’re not standing completely on their own.”
First of all, make no mistake: “tax increment financing” or TIF is not just some tax incentive. Under a TIF agreement, all new taxes--in most cases for 25 years (if not permanently)--are collected by the taxing entity. However, instead of the taxes collected from citizens, businesses and property owners going to the taxing entity to fund those things you’d expect them to fund (like the Sheriff’s Office in the County; the CSPF, CSFD, roads and stormwater in the City; school building infrastructure upkeep and hiring teachers for D11; buying books and providing library services for the PPLD), the collected taxes are transferred to the Urban Renewal Authority (URA). The URA’s appointed, unaccountable-to-citizens board will then, in meetings that are not video recorded, transfer those dollars to private developers to assist them in building private development. While the practice is extremely “friendly” to one particular “business,” the practice of transferring tax dollars to one government-favored business over another is anything but being “business friendly.”
Free market capitalism is based on free market competition. It is difficult to fathom how a non-favored business not receiving tens of millions in direct assistance from taxpayers could possibly compete with one who doesn’t. Incredibly, one county commissioner acknowledged the issue, but wrote if off by stating the competing businesses may be getting some kind of other help—“they’re not standing completely on their own.”