Tax-Increment Financing

We would like to thank the Tom Tresser and the TIF Illumination Project of the Civic Lab for all their hard work and allowing us to use their articles and videos to educate Houston on TIF’s

 

“In 2014 alone, TIRZ’s collected $135.9 million in property taxes. Plenty of that money goes to support worthwhile projects, but those projects only exist within the boundaries of the districts. Meanwhile, drivers all across Houston have to navigate roads that look like they’re modeled from NASA’s new pictures of Pluto.”
http://www.chron.com/opinion/editorials/article/Fighting-inequity-6400511.php

Background on TIF:
Tax increment financing programs go back to 1952, when California became the first state to raise matching funds for federal urban development grants. Today, TIFs (Texas is the only state that calls its tax increment program a TIRZ) are a nationwide trend because of diminished federal financing for infrastructure. Aside from Arizona, every U.S. state has used the financing method that relies upon anticipated increases of property-tax revenues.
http://www.houstonpress.com/news/how-houston-uses-the-tirz-system-to-benefit-high-dollar-areas-and-ignore-poorer-neighborhoods-7497253

What is Tax-Increment Financing?
Tax-Increment Financing (TIFs) is used by City Council to attract new investment to an area. TIFs help finance the cost of redevelopment and encourage development in an area that would otherwise not attract sufficient market development in a timely manner. Taxes attributable to new improvements (tax increments) are set-aside in a fund to finance public improvements within the boundaries of the zone.
http://www.houstontx.gov/ecodev/TIRZ

Problems:

  • TIRZ are being used as a way to avoid Houston’s bureaucratic Revenue Cap
  • Board of directors are not officially public officials so they are not held accountable to those within their district
  • Board of directors have eminent domain powers
  • Board of directors may issue bonds with little oversight by the city, county or state
  • The criteria to creating a TIRZ is too vague, with no oversight or accountability

 Solutions:

  • Pass constitutional amendment requiring all TIRZ be terminated at 10 years.
  • All bonds, projects and taxes but be finished by the end of the 10th year of operation
  • Restrict how much of the city can be within a TIF district
  • If the TIRZ surplus is not spent after 5, it automatically goes back to the general fund

 

Texas Constitution
Code – Tax Code
Chapter – 311 Tax Increment Financing Act
Section – 311.003 Procedure for Creating Reinvestment Zone
Section – 311.009 Composition of Board of Directors
Section – 311.010 Powers and Duties of Board of Directors
Section – 311.005 Criteria for Reinvestment Zone

 

Tax Increment Zones (TIRZ) Expansions Designed to Beat Revenue Cap

US PIRG – Tax-Increment Financing: The Need for Increased Transparency and Accountability

Is Tax Increment Financing Racist? The Racially Disparate Impact in Chicago’s TIF Spending

Huntsville City Council votes unanimously to repeal TIRZ No. 1

Sealy’s lone TIRZ may fall short

Kansas city to consider terminating tax increment financing district

North Dakota Supreme Court upholds Bismarck’s tax increment financing plan

Bismarck Radisson Pays N0 to Schools and Parks

U.S. Supreme Court – Back Seizure of Property for Development 5-4

Del Rio TIRZ ordinance repeal to be considered

Midland Downtown revitalization without the TIRZ

Midland Residents Not Happy After City Council Votes to Get Rid Of TIRZ After Next Fiscal Year

Business Journal – Houston Taxpayer Money Being Misused Critics Say

US PIRG – Shining a Light on Tax Increment Financing in Chicago

City Council Moves Away from Downtown TIRZ Idea, But Closer to Lone Star Rail Plan

Baltimore Sun – Tax increment financing, or TIF, is bad public policy amounting to welfare for the wealthy

Protecting Low Income Residents During Tax-Increment Financing

Tax Increment Financing: Tweaking TIF for the 21st Century

Houston Free Press – How Houston Uses the TIF System to Benefit High-Dollar Areas and Ignore Poorer Neighborhoods

Business Journal – Turmoil in the summer of TIF

Houston Chronicle – TIF zones remove too much power from elected officials in Houston.

Is HISD getting short end of local TIF carrot?

CATO – Crony Capitalism and Social Engineering: The Case against TIF

Center for American Progress – Raise Needed Revenue Efficiently and Fairly

Daily Kos – California, Birthplace of TIF, Axes It

Business Journal – As California’s TIF goes, so might Colorado’s

Brookings – Tax Increment Financing in the Kansas City and St. Louis Metropolitan Areas

Tax Increment Financing Raises Costs, Hides Giveaways to Politically Connected

TIF – Good idea gone bad?

Spring Branch TIRZ proposal gets pulled at the last minute

65 The Most Popular Tool: Tax Increment Financing and the Political Economy of Local Government

Factors that Influence the Size of Tax Increment Financing Districts in Texas

Three Chicago companies give back $34 million in tax breaks

Tax Increment Financing Race to the Bottom hurts our Environment

Mayoral Candidates Attack Status Quo at Green Party Forum

Denver Green Party – Responses to our 2015 Municipal Candidate Questionnaire

Green Jobs: Economic Development, Environmental Protection, and Workers’ Rights

Sierra Club – A Dilemma – Who Should Pay for Improving Water Quality?

Galveston City Council votes 5-1 to start closing TIRZ 11

Huntsville City Council votes unanimously to repeal TIRZ No. 1

Midland Downtown revitalization without the TIRZ

Houston Chronicle – Shed some light on TIRZ project

Houston Chronicle – Galveston development project shrouded in secrecy despite public investment

AEI – The growing trend of public redevelopment has increased cronyism, land confiscation, and waste

Mayor Rahm tries and fails to tell the truth about TIFs and taxes

CBS – Activist Protest TIF Funds For Planned Uptown High-Rise Development

Baltimore WYPR Radio – TIFs: The primer

Baltimore WYPR – To TIF or Not to TIF

Baltimore WYPR – Accountability Index: The Mega-TIF Fueling The Port Covington Development

Illinois Policy Institute – Chicago’s new TIF district would siphon millions of property-tax dollars into city slush fund

City Paper – Op-Alt: Embracing the TIF With a Twist

USA Today – City may overhaul tax incentives with new report

Knoxville Focus – City adds third-party review to Tax-Increment Financing process

The Atlantic – New Balance Bought Its Own Commuter Rail Station

Chicago Magazine – Is Chicago Really Broke?

Chicago Magazine – Five Ways to Fix Chicago’s TIF Mess

Chicago Reader – Shadow TIF Budget

Bloomington could soon see Mall of America tax windfall