Estes Park repeals TIF district

A city in Colorado has voted to repeal a TIF district. Wichitans ought to take notice. Randal O’Toole, the author of the post, notes the complexity of the TIF mechanism. This is in line with testimony I’ve delivered to the Wichita City Council, in which I characterized TIF districts as “a confusing arrangement that hides the reality and size of the subsidy given to TIF developers.” The benefit, I said, is that “this confusion serves a useful purpose to this council, because if the people of Wichita knew what was really happening, they’d be outraged.”

It’s likely that more TIF districts will be proposed as part of the revitalization of downtown Wichita, as our planning firm, Goody Clancy, has said that Wichita should “Continue to employ established TIF funding mechanisms.”

O’Toole will be visiting Wichita on Thursday and Friday February 4 and 5 for a series of events, including a public lecture that Thursday evening. Details will follow.

I’ve reproduced the post in its entirety below. The original version, complete with many links to supporting documents, is at Estes Park Repeals TIF District.

In what leaders hope to be the start of a movement, nearly 61 percent of voters in the city of Estes Park, Colorado decided to abolish the city’s urban-renewal district. The measure, which was put on the ballot through an initiative petition, also requires voter approval before the city creates another one.

Supporters of the urban-renewal district made the usual claim that tax-increment financing doesn’t cost anything. In fact, it takes money that would otherwise go to schools and other urban services and puts it in a slush fund for city officials to use to benefit favored developers.

The city made every effort to keep the measure from passing, including scheduling it during a time when many voters were out of town and it would be a single-issue election, thus depressing voter turnout. Despite this, voter turnout exceeded 60 percent.

After the election, the Mayor Bill Pinkham announced that the city may challenge the vote in court. However, he later backed away, perhaps because he couldn’t find any legal grounds to contest it.

The problem with tax-increment financing is that it is just complicated enough that it is easy to confuse people about it. This makes it hard for critics in major cities such as Denver or Portland to gather enough signatures to put a similar measure on the ballot in their cities. But if some more smaller cities pass such measures, it may inspire similar campaigns in the big cities.

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