http://host.madison.com/wsj/news/local/ ... 963f4.html
Before the city "loosens" the rules for granting TIF, I think they and the media need to do a better job of explaining exactly how it works, with an emphasis on the payback part. This will be particularly important in the wake of the Edgewater odyssey.
Even some of the brief descriptions of the proposed changes suffer from vagueness or slight legalese.
The draft policy, forged by a three-person EDC subcommittee, would:
• Loosen a rule that limits TIF loans to half the new taxes a project generates over the life of a TIF district.
• Loosen a standard that allows TIF only when a financial gap exists for a proposed project to include other factors for affordable housing or employment-oriented projects, including competitive factors for the latter.
• Eliminate a rule that lets the city share in developer profits.
• Expand opportunities for TIF “pay as you go,” in which a developer finances a project and the city uses some or all of the new property taxes generated to retire the debt.
• Add options to a requirement for developers to make personal guarantees for TIF assistance, such as allowing corporate guarantees or other security for affordable housing, employment-oriented or nonprofit projects.
• Eliminate a rule requiring simultaneous TIF and land use approvals.
• Create target development areas for commercial and industrial projects.
The article includes the usual simplistic explanation of how TIF works:
With TIF, cities and others with taxing authority freeze the value of property in an area, called a TIF district. The city then uses taxes from growth in that area to assist private projects, build streets or make other public improvements. After loans and expenses are repaid, the district is closed and the more valuable property returns to the tax rolls.
The city then uses taxes from growth in that area to assist private projects, build streets or make other public improvements.
...makes it sound like growth somehow happens before assistance is given out. You know that's not the case so why can't it be written in a way that better explains what the case is?
It's not quite the code talking we get from the Fed (quantitative easing anybody?) but to me it's just confusing enough to make me believe that they don't want us to really understand it.