TIF districts

Tax increment financing (TIF) resources

Tax increment financing (TIF) resources

Resources on tax increment financing (TIF) districts. Tax Increment Financing: A Tool for Local Economic Development. Richard F. Dye and David F. Merriman. Tax increment financing (TIF) is an alluring tool that allows municipalities to promote economic development by earmarking property tax revenue from increases in assessed values within a designated TIF district. Proponents point to evidence that assessed property value within TIF districts generally grows much faster than in the rest of the municipality and infer that TIF benefits the entire municipality. Our own empirical analysis, using data from Illinois, suggests to the contrary that the non-TIF areas of…
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Wichita TIF projects: some background

Wichita TIF projects: some background

Tax increment financing disrupts the usual flow of tax dollars, routing funds away from cash-strapped cities, counties, and schools back to the TIF-financed development. TIF creates distortions in the way cities develop, and researchers find that the use of TIF means lower economic growth. The consideration this week by the Wichita City Council of two project plans in tax increment financing districts offers an opportunity to examine the issues surrounding TIF. How TIF works A TIF district is a geographically-defined area. In Kansas, TIF takes two or more steps. The first step is that cities or counties establish the boundaries…
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Economic development in Wichita: Looking beyond the immediate

Economic development in Wichita: Looking beyond the immediate

Decisions on economic development initiatives in Wichita are made based on "stage one" thinking, failing to look beyond what is immediate and obvious. Critics of the economic development policies in use by the City of Wichita are often portrayed as not being able to see and appreciate the good things these policies are producing, even though they are unfolding right before our very eyes. The difference is that some look beyond the immediate -- what is seen -- and ask "And then what will happen?" -- looking for the unseen. Thomas Sowell explains the problem in a passage from the…
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Wichita economic development items

Wichita economic development items

The Wichita city council has been busy with economic development items, and more are upcoming. At the November 25 meeting of the Wichita City Council, on the consent agenda, the council passed these items. Approved a sublease in a warehouse. This action was necessary as the incentivized warehouse pays no property taxes due to a subsidy program. Given tax costs and industrial building rents, this policy gives these incentivized buildings a cost advantage of about 20 to 25 percent over competitors. That’s very high, and makes it difficult for existing buildings to compete. This lease is for 40,500 square feet…
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Tax not me, but food for the poor

This is Union Station in downtown Wichita. Its owner has secured a deal whereby future property taxes will be diverted to him rather than funding the costs of government like fixing streets, running the buses, and paying schoolteachers. This project may also receive a sales tax exemption. But as you can see, the owner wants low-income households in Wichita to pay more sales tax on their groceries.
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Old Town Cinema TIF update

Old Town Cinema TIF update

A Wichita city report provides a somber look at the finances of a tax increment financing district. The City of Wichita Department of Finance has prepared an update on the financial performance of the Old Town Cinema Tax Increment Financing (TIF) District. There's not much good news in this document. The financial performance would be worse if the city had included the costs of the no-interest and low-interest loan made to the owners of property in this TIF district. But it doesn't appear that those costs are included. Here's an excerpt from the report: In 2000, the appraised value of…
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What incentives can Wichita offer?

What incentives can Wichita offer?

Wichita government leaders complain that Wichita can't compete in economic development with other cities and states because the budget for incentives is too small. But when making this argument, these officials don't include all incentives that are available. In making the case for an economic development fund paid for by a sales tax, the argument goes like this: "Wichita and Sedgwick County compete conservatively with incentives. The City of Wichita and Sedgwick County have a total of $1.65 million in new uncommitted funds for cash incentives this year with any unused money going back to the general fund." (Will Wichita…
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Wichita: We have incentives. Lots of incentives.

Wichita: We have incentives. Lots of incentives.

In this excerpt from WichitaLiberty.TV: Wichita government leaders complain that Wichita can’t compete in economic development with other cities and states because the budget for incentives is too small. But when making this argument, these officials don’t include all incentives that are available. View below, or click here to view on YouTube. More information on this topic is at Contrary to officials, Wichita has many incentive programs.
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Contrary to officials, Wichita has many incentive programs

Contrary to officials, Wichita has many incentive programs

Wichita government leaders complain that Wichita can't compete in economic development with other cities and states because the budget for incentives is too small. But when making this argument, these officials don't include all incentives that are available. The document Will Wichita Accelerate Competition for Primary Jobs? contains contradictory information about money available for economic development incentives in Wichita. The usual argument that officials make is represented by this quotation from the report: "Wichita and Sedgwick County compete conservatively with incentives. The City of Wichita and Sedgwick County have a total of $1.65 million in new uncommitted funds for cash…
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Economic development in Wichita, steps one and two

Economic development in Wichita, steps one and two

Critics of the economic development policies in use by the City of Wichita are often portrayed as not being able to see and appreciate the good things these policies are producing, even though they are unfolding right before our very eyes. The difference is that some look beyond the immediate -- what is seen -- and ask "And then what will happen?" -- looking for the unseen. Thomas Sowell explains the problem in a passage from the first chapter of Applied economics: thinking beyond stage one: When we are talking about applied economic policies, we are no longer talking about…
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Exchange Place still not good for Wichita, others

Tomorrow the Wichita City Council will consider a redevelopment plan for the Exchange Place project in downtown Wichita. Despite having shed the problems with the former owners, the project has become an even worse deal for the taxpayers of Wichita, Kansas, and the nation. Those looking for jobs and for investment capital to meet consumer demands are worse off, too. Here's what the city council agenda packet gives as the sources of financing for this project. HUD Loan Amount $29,087,700 Private Equity 5,652,254 Tax Credit Equity 19,370,395 TIF Proceeds 12,500,000 Total Sources of Funds $66,610,349 Consider each of these sources…
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Wichita economic development: And then what will happen?

The whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups. -- Henry Hazlitt Critics of the economic development policies in use by the City of Wichita are often portrayed as not being able to see and appreciate the good things these policies are producing, even though they are unfolding right…
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WichitaLiberty.TV August 4, 2013

In this episode of WichitaLiberty.TV, host Bob Weeks explains a complicated economic development mechanism used in Wichita that hides the true business welfare and cronyism taking place. Then Bob notices that the City of Wichita has banished disagreement, and then shows how the unintended consequences of regulation can be deadly. Episode 7, broadcast August 4, 2013.
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Paying taxes, but not quite

A complicated economic development mechanism used in Wichita hides the true business welfare transaction. In today's Wichita Eagle "serial entrepreneur" and hotelier Jack DeBoer talks about a new apartment project to be built in downtown Wichita, just across the Arkansas River from the WaterWalk development. In the article, the reporter writes: The Wichita apartments are expected to be complete by spring 2014, DeBoer said. They will be on 4.4 acres of city-owned land, which Value Place is leasing for $1 a year for 93 years. That agreement was approved by the Wichita City Council last September. DeBoer noted that Value…
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Derby forms a TIF district

The city of Derby, Kansas has formed a tax increment financing (TIF) district. TIF is a method of diverting the normal flow of property tax revenue so that it benefits private interests rather than the public treasury. In Kansas, cities form TIF districts. Then, any affected county and school district may vote to veto its formation. They have 30 days to do this. If they take no action, they lose their ability to veto, and the TIF district is created. The Sedgwick County Commission will consider whether to veto the formation of this TIF district next Wednesday. Here are documents…
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Economic development in Wichita, the next step

Critics of the economic development policies in use by the City of Wichita are often portrayed as not being able to see and appreciate the good things these policies are producing, even though they are unfolding right before our very eyes. The difference is that some look beyond the immediate -- what is seen -- and ask "And then what will happen?" -- looking for the unseen. Thomas Sowell explains the problem in a passage from the first chapter of Applied economics: thinking beyond stage one: When we are talking about applied economic policies, we are no longer talking about…
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Americans for Prosperity-Kansas applauds Sedgwick County Commission for rejecting public financing for Bowllagio

TOPEKA, KAN -- The Kansas chapter of the grassroots group Americans for Prosperity applauds the Sedgwick County Commission for rejecting the proposed tax-increment financing (TIF) district for the Bowllagio development in Wichita. “We are pleased that Sedgwick County commissioners unanimously voted against public funding for this entertainment development,” said AFP-Kansas grassroots coordinator Susan Estes. “Commissioners apparently realized it wasn’t a good deal for taxpayers in Wichita and Sedgwick County.” Estes said this proposed development was another example of a developer receiving several layers of public financing, and that additional public financing would give the Bowllagio developers an unfair advantage over…
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Tax increment financing district (TIF) resources

Resources on tax increment financing (TIF) districts. An updated version of this article is here. Wichita should reject Bowllagio TIF district. Wichita should reject the formation of a harmful tax increment financing (TIF) district. Wichita TIF: Taxpayer-funded benefits to political players. It is now confirmed: In Wichita, tax increment financing (TIF) leads to taxpayer-funded waste that benefits those with political connections at city hall. Tax increment financing (TIF) and economic growth. There is clear and consistent evidence that municipalities that adopt tax increment financing, or TIF, grow more slowly after adoption than those that do not. Does tax increment financing…
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Wichita should reject Bowllagio TIF district

Update: Video of some testimony from the meeting is here. This week the Wichita City Council will consider more economic development through the creation of a tax increment financing (TIF) district. For the good of the city, the council should reject this proposal. Supporters of TIF -- besides the obvious motivations of the developers who are directly enriched by them -- point to the jobs and development that they say TIF creates. But there's plenty of evidence to the contrary, on both jobs and development. Supporters also say TIF has no cost, which, if true, calls into question the entire…
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Wichita economic development initiatives to be announced

Tomorrow the Wichita Metro Chamber of Commerce will announce, according to the Wichita Eagle, new economic development initiatives. Said to be the product of months of discussion, past history suggests that the efforts will not be fruitful for the Wichita area. The inclinations of the parties involved in this effort are for more government intervention and less reliance on economic freedom and free markets. Do economic development incentives work? Judging the effectiveness of economic development incentives requires looking for the unseen effects as well as what is easily seen. It's easy to see groundbreaking and ribbon cutting ceremonies. It's more…
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