TIF is wrong option for North Columbia

WE APPRECIATE Columbia’s attempt to make a proposed special taxing district aimed at generating funding for improvements in North Columbia more palatable.

Instead of siphoning new tax dollars away from city and county services and local schools for 25 years, the new plan would cut that to 15 years while capping the amount to be generated to $40 million. The number of projects would be trimmed from seven to five. In addition, a panel would be created to oversee the tax collections and the projects and to keep governing bodies in the loop; also an accounting firm would be hired to conduct independent audits.

But while the changes make for a better proposal, it is still unacceptable for the city to divert future tax dollars away from services, particularly the schools.

For sure, tax increment financing districts, or TIFs, can be powerful tools in transforming struggling areas; they allow governments to use new taxes generated by new development and increased property values to pay for parks, roads and other infrastructure. That’s what created the vibrant Vista: Columbia, Richland County and Richland School District 1 poured more than $115 million into public projects in the former warehouse district, and private investment eventually followed. While it was largely a success, the city spent far more money than expected and wasn’t always transparent. The city also spent money it shouldn’t have and had to repay Richland County.

There’s little debate about whether long-neglected North Columbia needs help to turn its fortunes around; residents there have waited as other areas have received aid. But a TIF is not the answer.

Although officials correctly stress that TIFs don’t cause general tax increases, the fact is that they shift the burden for paying for city, county and school services to property owners outside the districts.

What is being called the “Renaissance” tax increment finance district stretches over 3,600 acres from Gervais Street north to Main Street and westward from Elmwood Avenue to Two Notch Road. The focal point of the district would be the proposed Bull Street development, which would get priority when it comes to funding. Even if the city implements a TIF, it wouldn’t be able to help the North Main area much because it would use a hefty portion of the money to pay for infrastructure for the planned Bull Street development. Developer Bob Hughes has indicated that he would need up to $40 million.

City officials wisely have said they are open to considering other funding options, such as federal grants or even short-term taxes on existing commercial and business properties. We believe the city should nix the TIF idea and concentrate on those other options. That does not mean that it can’t use incremental tax revenue from Bull Street and other development in the district. But instead of locking up those dollars for 15 years and having no flexibility in their use, the council could set aside new taxes annually to use for Bull Street and other projects. With Bull Street being built in phases, it would not need the dollars all at once.

It remains to be seen whether Richland County Council and the Richland 1 school board will sign on; both rejected the TIF in the midst of the recession. As they consider the proposal, they should ask themselves two important questions: Is a TIF any more acceptable now, and is it fair for taxpayers outside the district to have to take on the new, long-term burden that would come their way?

We think the answer to both is no.