TIF Doesn’t Create Jobs

Paul F. Byrne, a professor at Washburn University in Topeka, Kansas—who has examined tax increment financing (TIF) use in Missouri for the Show-Me Institute—has a new working paper on TIF job creation in Missouri. In the paper, Byrne examined data from the Missouri Department of Revenue and the U.S. Bureau of Labor Statistics to see if there is a correlation between the claimed job creation from TIF districts and county-wide job growth.

Anecdotally, it appears that TIF doesn’t really create jobs. As we’ve written about the H&R Block TIF and the Power & Light District, TIF doesn’t really create jobs. At most it just moves them from elsewhere in the area. Byrne wondered,

If the number of jobs created by TIF, as reported by TIF administrators, is a true economic impact, then the number of reported jobs should have a positive impact on county employment as measured by the BLS.

Anyone familiar with research on TIF (and not everyone cares about the research) will not be surprised by the results. Byrne concludes,

This paper’s results indicate that the number of jobs supported by TIF, as reported by local economic development agencies in Missouri, does not have a significant positive effect on county employment as measured by the BLS. The lack of a positive impact of reported jobs on employment suggests that TIF-supported jobs either come at the expense of other areas in the county or would have located in the county regardless of the existence of Missouri’s TIF districts.

TIF diverts a lot of money from municipalities that would otherwise go to support schools and basic services. Research from all over the country tells us that it does not create jobs, does not spur investment, and does not mitigate blight. It’s time for reform or elimination altogether.