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Posts tagged as “TIF districts”

Downtown Wichita Arena TIF District

Remarks to Wichita City Council, August 5, 2008. When I’ve been talking to people in Wichita, I find there is great confusion about the way…

Do Wichita TIF Districts Create Value?

A recent Wichita Eagle article City tax districts aren’t breaking even reports on some of the problems with tax increment financing, or TIF, districts in…

Wichita and the Old Town Warren Theater Loan

Remarks to be delivered to the Wichita City Council, July 1, 2008. Mr. Mayor and members of the Council, we are potentially beginning a journey…

Wichita city manager’s warning is too late

Wichita Interim City Manager Ed Flentje issued this warning to the council: "There are in this community much larger businesses with much larger employment who may see this opening as something that will open a door for those businesses to come and say, 'You've done it before, you can do it for us.'"

Dr. Flentje, I hate to break the news to you, but the door is already wide open.

Tax Abatements in Wichita

A few months ago I spoke before this council asking that you not grant a tax abatement. At that time I was told that granting a property tax abatement doesn't have any impact on City of Wichita spending.

I found this quite remarkable, that new homes and buildings can be built but not consume any additional resources that the city and other local governments supply. If this is truly the case, why should a new development of any type at any location have to pay any property tax at all?

Remarks to Wichita City Council, April 1, 2008

By asking for the TIF financing, developers are sending us a signal that without the special tax favor, their project would not be economically feasible. They evidently have judged that it would not be profitable. They must feel that they will not be able to sell or rent at prices that will cover their costs of developing this project.

This means that proceeding with the project is investing capital somewhere other than its most-valued use. We know that because developers build other things in Wichita without receiving a subsidy, and they are able to earn a profit.

Tax increment financing in Wichita benefits few

How does a TIF district work? The Wichita Eagle reported: "A TIF district doesn't cost local governments any existing tax money. It takes property taxes paid on new construction that would ordinarily go into government coffers and redirects it to the bond holders who are financing the project."

Sedgwick County surrenders key tax advantage

Spirit Aerosystems CEO Jeff Turner defended the massive spending hike that was used as the primary justification for the county's 8.8 percent property tax hike in his editorial August 9, 2006. Turner's support for this increased government spending ignored some important ramifications behind this economically destructive vote.

Tax increment financing in Iowa

Readers of The Voice For Liberty in Wichita are well aware that I believe that when the government provides subsidies to businesses -- either in the form of cash payments or preferential tax treatment -- we create a corrosive business environment. Government picks winners and losers for political reasons, rather than letting the market decide which companies are doing a good job. Government also spends money inefficiently. Instead of letting the market decide where to best allocate capital, government chooses who receives capital taken from the people through taxation according to the whims of politicians spending other peoples' money.

Tax Abatements For All

Recently I wrote about the Mississippi Beef Plant (The Mississippi Beef Plant Has a Lesson For Us) and its spectacular costs to the taxpayers of Mississippi. I wondered if there were less spectacular failures that we didn't know about because they weren't reported in the news media. Failures in this context could mean a situation where the taxpayers have to make good on a bond or debt that the benefiting company didn't pay, or it could mean a situation where the company doesn't default, but fails to deliver on the promised economic development activity.

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