THE TROUBLE WITH TIF: Tax incentive plan can do more harm than good, researchers say
“TIF too often strays from its core purpose — to redevelop blighted areas and promote economic development — found the report’s authors, economist Peter Fisher, Ph.D. research director of the nonpartisan Iowa Policy Project; and Michael Lipsman, a retired tax research and program analysis manager for the Iowa Department of Revenue.
TIF can easily “degenerate” into a “perpetual cash cow to finance city operations that have nothing to do with economic development,” the researchers discovered. Sold to voters and politicians as “temporary financing,” with minimal impact on area agencies, the TIF cash cow is instead “a never-ending diversion of revenue that affects all jurisdictions providing services to residents.”
In five Iowa cities, for instance, TIF revenue exceeds property tax revenue. The result: “higher property taxes on county and district taxpayers residing outside the city,” the report notes.”
The Columbia Heart Beat 6 February 2014.
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