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TIF Conversation overdue
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FarkThe conversation about tax increment financing that Rapid City is having right now is overdue.
We are encouraged that the Rapid City TIF Committee is currently reviewing the city’s guidelines and policies that govern the use of TIFs. We urge the committee to tighten some of its policies, redefine others and ensure that the entire process is open to the public and completely transparent.
TIFs are a growing source of infrastructure funding for cities all across the United States, and Rapid City is no exception. TIFs have been a much-utilized tool in the economic development toolbox of Rapid City in recent years.
Our city government has approved 65 tax increment districts since 1983. Of those, 22 never came to pass, 14 have been paid off and 29 are still active.
That liberal use of TIF districts has not been without controversy, and we think the best way to handle any controversy is with information and education. We hope local taxpayers take advantage of the committee’s open meetings and forums to learn more about TIFs and to form their own opinions about the value of TIFs to the future of Rapid City.
TIFS are a unique public/private partnership which, when used judiciously, can create a win-win situation that improves profit margins for business and increases tax revenues in the long run.
But TIFs are also a form of taxpayer subsidy that diverts property taxes from government coffers to development costs. There are costs associated with TIFs, in the form of delayed tax revenues on developed land, and those costs are real, especially to other government entities such as school districts and Pennington County, which have no voice in the creation of city-approved TIFs but live with the results.
Those costs are often dismissed by TIF proponents, but should not be. Those issues must be part of this community’s conversation about TIFs.
We think Rapid City should use TIFs, but it must use them wisely and conservatively for the benefit of the entire community, not to benefit the profit margins of private businesses.
Most importantly, we want TIFs used with complete transparency between public taxpayers and the private developers who apply for them.
The opinions above are from readers of rapidcityjournal.com and in no way represent the views of the Rapid City Journal or Lee Enterprises.
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