Oak Creek may form two tax incremental finance (TIF) districts to spur development.
TIFs were initially created with the intent of rescuing blighted areas.
The areas being considered in Oak Creek for the TIF districts are - 13th & College and Howell & Oakwood – hardly blighted areas.
As I wrote in a previous post, “Another much touted, yet becoming ever more so destructive, policy tool is tax incremental financing (TIF). These were initially established to bring investment to blighted, low-income areas. But nowadays, more states are loosening their eligibility requirements and allowing affluent areas to reap the benefits. TIFs allow a municipality to issue a bond to pay for part of the costs of the new development. The property tax revenue generated by the development is then used to pay off the bonds. Some municipalities also allow sales tax increments, where the sales tax generated by the new development can be diverted to redevelopment costs.”
In essence, using taxpayer money (cheap credit from a municipality) to finance speculative development where the rewards benefit the usual cast of characters at the expense of the community at large.
For Further Reading:
TIFs, Greenfields, and Sprawl
Subsidizing Sprawl, Subsidizing Walmart
Straying From Good Intentions
Shifting The Burden
Recession Shriveling TIF Revenue Returns
Property Tax Abatements and Your School
Legislation Introduced to Help Troubled TIFs