Search Results for: historic tax credits

Kansas historic tax credits should end

The Wichita Business Journal reports that without historic tax credits, some redevelopment projects might stop. In other words -- the Business Journal isn't quite so blunt -- if taxpayers don't give developers money, some of their projects might not be economically feasible. Or so the developers say. Spotlighted in Wichita Business Journal reporting is Dave Burk, a well-known developer in Wichita who specializes in getting the taxpayer to fund portions of his developments. Often the funding comes in the form of TIF district financing or special assessment financing used in ways it's not normally used. These complicated financial arrangements serve to hide what's really happening. Developers like Burk say that these financing schemes don't cost government or the taxpayer anything. But they go to great lengths to secure them. In…
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Wichita makes case for tax credits

At yesterday's meeting of the South-central Kansas legislative delegation with government officials, the City of Wichita spent most of its time presenting the case that cuts made to a program of tax credits for historic buildings should be restored. Initially Mayor Carl Brewer asked legislators for continued funding for the affordable airfares effort, for the National Institute for Aviation Research, and the aquifer recharge project. But the primary focus of the city's requests became clear when Jeff Fluhr of the Wichita Downtown Development Corporation introduced Christy Davis, a historical preservation consultant who operates a company that assists property owners and governments in obtaining funding for historic preservation projects. She said that there is public policy in Kansas that supports historic preservation, and that the tax credit program has been a…
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Kansas historic preservation tax credits should not be expanded

Testimony to be delivered to the Kansas House Taxation Committee. The Kansas historic preservation tax credit system should not be expanded beyond its current limit. We must recognize that a tax credit is an appropriation of Kansans' money made through the tax system. If the legislature is not comfortable with writing a developer a check for over $1,000,000 -- as in the case with one Wichita developer -- it should not make a roundabout contribution through the tax system that has the same economic impact on the state's finances. While I would not recommend writing checks to developers, this practice would be more efficient than the current system of subsidy through the tax system. Last month the Legislative Division of Post Audit (audit 10PA03.1) found that the system is not…
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Kansas historic preservation tax credits: the hearing

On Wednesday, the Taxation Committee of the Kansas House of Representatives heard testimony on HB 2496, which would expand the historic preservation tax credit program. This program provides tax credits to qualified historic preservation projects. I testified at the hearing, and my written testimony is at Kansas historic preservation tax credits should not be expanded. The idea of tax credits confuses some people. Some may confuse credits with a tax deduction. Some may believe that tax credits are given out at no cost to the state. But in fact, the tax credits are quite costly. As I told the committee members, if the state grants a tax credit, and then does not reduce state spending by the amount of the tax credit, other taxpayers in Kansas have to make up…
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Historic preservation tax credits, or developer welfare?

A Wichita developer seeks to have taxpayers fund a large portion of his development costs, using a wasteful government program of dubious value. When you hear of a program titled "historic preservation tax credits" you might find yourself in agreement. Preserving history: Who can be against that? And tax credits: Aren't those just technical adjustments on someone's tax form? If you look closely, however, you'll find that the historic preservation tax credits program can include buildings with only the slightest historic significance, and has great cost to taxpayers. The Colorado-Derby Building at 201 N Water Street in Wichita has been nominated for placement on the Register of Historic Kansas Places. It's a nondescript building which currently houses administrative offices for the Wichita public school district and is known by a…
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Union Station TIF provides lessons for Wichita voters

A proposed downtown Wichita development deserves more scrutiny than it has received, as it provides a window into the city's economic development practice that voters should peek through as they consider voting for the Wichita sales tax. Next week a Wichita real estate developer will ask the Wichita City Council to approve a package of incentives for the redevelopment of Union Station in downtown Wichita. The proposal contains many facets that citizens need to understand. Additionally, the city's handling of this matter is something that voters will want to keep in mind as they make their decision on the proposed Wichita sales tax in November. The city's documents on this matter are available at Resolution Considering the Establishment of the Union Station Redevelopment District (Tax Increment Financing). Tax increment financing…
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Tax expenditures, or loopholes

While most critics of government spending focus on entitlements, regular appropriations, and earmarks, there is a category of spending that not many have paid much attention. This spending is called "tax expenditures." This year as part of the debate or controversy over raising the federal debt ceiling, attention is being paid to the cost of these tax expenditures, although the term commonly used is "loophole." It's a big issue. As economist Martin Feldstein wrote in the Wall Street Journal, tax expenditures were thought to increase the federal budget deficit by $1 trillion in 2010. We know where President Barack Obama stands. He is firm in wanting to increase tax revenue by eliminating tax expenditures. He focuses on those that apply to the rich, although there are plenty of tax expenditures…
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The Obama tax cuts

In the presidential debate last week, President Barack Obama spoke of his tax cuts: "So at the same time that my tax plan has already lowered taxes for 98 percent of families, I also lowered taxes for small businesses 18 times. And what I want to do is continue the tax rate -- the tax cuts that we put into place for small businesses and families." Are these Obama tax cuts "real" cuts that will lead to economic growth, or just government spending programs in disguise? For tax cuts to be productive in growing the economy, they have to be associated with something positive, namely with work, saving, or investment. What many people positively respond to is a reduction in marginal tax rates, that is, the tax that must be…
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In Wichita, historic preservation tax credits an inefficient form of developer welfare

As part of the subsidy plan for Douglas Place, a downtown Wichita hotel being proposed, developers plan to make extensive use of historic preservation tax credits to fund their project. This form of developer welfare, besides being inefficient, is largely hidden from public view. According to Allen Bell, Wichita's Director of Urban Development, the project's team, which is lead by David Burk, plans to tap $3.8 million in state tax credits and $3.5 million in federal tax credits, for a total of $7.3 million in this form of subsidy. Tax credits may be a mystery to many, but there is no doubt as to their harmful effect on state and federal budgets. When using tax credits, the government, conceptually, issues a slip of paper that says something like "The holder…
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Myth of Obama tax cuts

As the nation's attention is focused on whether Congress will extend the Bush tax cuts of 2001 and 2003, some are calling attention to the Obama tax cuts and calling for their extension. These tax "cuts" -- and I use quotes deliberately -- are part of the stimulus bill passed in February 2009. Polls show that very people know of these tax cuts. So what are the Obama tax cuts? There was one program that qualified -- sort of -- as a "cut," and several tax credit programs. More information about these programs from the Obama Administration is at Recovery.gov, The largest item that benefited most people is the Making Work Pay Tax Credit, a two-year program that rebates $400 per year to individual taxpayers, or $800 per year for…
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