Tax Increment Financing (TIF) harms schools. At least that’s what the superintendent of the Liberty School District says. He claims TIF is to blame for the magnitude of a proposed 43-cent tax hike that school district officials have placed on the Nov. 8, 2011, ballot.
From the Liberty Tribune: “The tax rate the district considers necessary would be significantly lower if not for TIF,” Superintendent Mike Brewer said.
Frankly, I’m inclined to agree with him.
TIF allows developers to freeze taxes at a base level and invest any increase in property tax value that otherwise would go toward taxes into developing the property, for up to 23 years. Essentially, TIF allows newly-developed property to escape the higher taxes that higher property values normally entail. If a residential developer acquires approval of a TIF plan from the city, new homeowners can send their kids to public schools but the taxes collected will go towards paying off the debt for the development instead of financing their children’s education. A good deal if you can get away with it.
Missouri law governing the use of TIF underrepresents schools and grants cities a majority on commissions authorizing TIF use. Considering the 43-cent tax increase that Liberty School District officials have placed on the ballot, it seems schools are feeling financial pressure from TIF and that property owners are possibly facing higher taxes. For the sake of lower taxes and better education, TIF law should be revisited.