Missouri Rep. Brandon Ellington insists he’s not trying to kill tax increment financing, the controversial method of subsidizing development projects in supposedly blighted parts of Kansas City.
But that’s what his legislation now working its way through the General Assembly might do if it becomes state law. It could wipe out TIF, bury it and never look back.
That’s a bad idea. As confusing and complicated as TIF is for so many Kansas Citians who have come to view it as a handout to moguls, tax increment financing remains a tool worth keeping. It has proven essential to the development of downtown Kansas City, where construction is more expensive than it is in less-dense parts of the metro.
TIFs provide tax breaks to developers who can use the increase in taxes the project spins off to pay for the project itself. There’s no upfront public investment, and that’s important to know.
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So, no thanks, Rep. Ellington. The Kansas City Democrat wants to subject all TIF proposals to a public vote. A constitutional amendment would be needed to require a vote of the people on TIFs.
Ellington, like so many others, is frustrated with a process that appears to have been abused repeatedly, much to the benefit of deep-pocketed developers who continue to shun the east side of Kansas City. That’s where, in theory, tax increment financing could do the most good.
Problem is, the process of approving a TIF can now take six months or longer. It already involves lots of hearings, lots of scrutiny and lots of paperwork. Adding a costly election with an uncertain outcome would undermine anyone’s interest in pursuing a project. It’s obstructionist, and it would have a chilling effect on Kansas City development.
“This would be like killing a fly with a sledgehammer,” said development lawyer Jerry Riffel, a former city councilman.
TIF today isn’t what it used to be. Proposals are fly-specked more than ever. The City Council, under former councilwoman Cindy Circo, has made improvements and hired new people.
In another positive move, last year the council passed a cap on development incentives.
The easy thing to do in Jefferson City would be to bow to public pressure and kill TIF. Lawmakers should resist the temptation.