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The use of Tax Increment Financing or "TIF" as it is more commonly known can be a
powerful economic development tool. The original intent of TIF was to aid municipalities
in attracting development in areas where otherwise none would occur. The argument is that
usage of TIF "encourages development of blighted, substandard and economically underutilized
areas that would not be developed without public assistance." Established by MO State Statutes,
the mayor of a municipality is given the responsibility to appoint 6 commissioners to review
TIF requests and make recommendations for approval to the city council. These 6 commissioners
make up the TIF Commission.
Recent events in Kansas City have created a groundswell of opposition to TIF. Upscale areas
like the Plaza and Briarcliff have received TIF which has created a public outcry. I too echo
this sentiment of outrage. There is no reasonable standard by which one could rationalize the
use of economic development incentives in these areas.
For too long developers have argued in front of the TIF Commission that previous projects have received TIF so to level the playing field all projects deserve equivalent treatment. It seems this argument has been, and continues to be successful. New TIF plans are created almost monthly, as well as multiple revisions and expansions to existing TIF districts.
I am not against TIF. I believe that it is indeed a powerful economic development tool, when used responsibly. Unfortunately, the TIF process in Kansas City is an ad-hoc system relying on developers to approach the community with plans and requests for subsidies. I offer the following suggestions for policy change that I will pursue with the next mayor.
I. A comprehensive policy must be established to guide the TIF Commission in their decision making process. Specific areas in the City should be identified as target areas under a comprehensive city plan. Any requests for subsidies outside the context of this plan should be greeted with a much higher level of scrutiny and skepticism.
II. The mayor and council should establish desirable qualifications for the makeup of the TIF Commission. While I will stop short of absolute requirements, I think a mix of skills, abilities and geographic location should be considered when making these all important appointments. I would recommend at least one commissioner with an accounting or finance background. One with a planning background. One with an architectural background. One with a legal background. One with a neighborhood activist background and at least one with an extensive knowledge in commercial real estate development.
III. Openings on the TIF Commission should be highly publicized allowing all citizens who wish to serve the opportunity to submit their credentials for consideration. The selection process should be transparent, including the publishing of any and all applications so the public may see the talent pool from which the sitting commission was chosen.
IV. Appointed commissioners will have published biographies on the City website detailing their relevant qualifications for serving on the TIF Commission.
V. The TIF Commission should hold its meetings in the evenings so citizens who wish to testify on any particular application may do so without having to take a day off of work. TIF Commission meetings must be televised on Channel 2 and the internet, as well as accept public testimony via email that will be read into the record.
We must do a better job of utilizing our economic development tools. The recommendations I have made will not completely eliminate abuses of TIF, but they will go far in addressing the public's mistrust of our elected officials and our economic incentive policies.
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