The Wichita Business Journal reports that without historic tax credits, some redevelopment projects might stop.
In other words — the Business Journal isn’t quite so blunt — if taxpayers don’t give developers money, some of their projects might not be economically feasible. Or so the developers say.
Spotlighted in Wichita Business Journal reporting is Dave Burk, a well-known developer in Wichita who specializes in getting the taxpayer to fund portions of his developments.
Often the funding comes in the form of TIF district financing or special assessment financing used in ways it’s not normally used.
These complicated financial arrangements serve to hide what’s really happening. Developers like Burk say that these financing schemes don’t cost government or the taxpayer anything. But they go to great lengths to secure them. In the case of Burk, he makes sure to make plenty of campaign contributions.
But tax credits are pretty easy to understand. They excuse someone from paying taxes. If they’re refundable tax credits, the government will even send you a check.
This is a lot different from a tax deduction, in which case you get to reduce your income. That usually leads to a reduced tax liability, but by a much smaller amount. Maybe even nothing, if your business has a loss for the year.
Instead, tax credits reduce your tax liability on a dollar-for-dollar basis. And unless government reduces its spending by an equal amount, the rest of the taxpayers have to make up the difference.
The Kansas Legislature recognizes this, and in an effort to save from losing some revenue in a tough budget year, placed a cap on the amount of tax credits that could be issued over the next two budget years.
That’s what has Burk concerned. Without his gift from the taxpayers, he doesn’t know if he can complete his project.
Tomorrow, though, something might happen to change his prospects. That’s when the legislature meets for its ceremonial closing. Sometimes actual business is done, and there’s some talk, according to Hawver’s Capitol Report, that legislative action could be taken to help subsidized developers like Burk.
Let’s hope that the legislature decides in favor of free markets. If people want to live in historic buildings, let them pay the full cost of what it costs to produce these properties. Anything else means that the taxpayers at large pay for a privileged few like Burk and his tenants.
Sources tell me that Burk continually has his hand out a city hall, looking for whatever subsidy he can get — even to the point of annoying former city manger Chris Cherches.
It’s time to let free markets work. If Dave Burk has an idea he can sell to the public and make a heap of money, more power to him. But let’s stop the taxpayer-subsidized gravy train.