Editorial: TIFs on top of sales tax excessive
12/04/2012 12:00 AM
12/03/2012 5:49 PM
WHEN COLUMBIA City and Richland County councils delayed action on special new tax districts until after the vote on the transportation sales tax, we assumed that meant the idea would die if the tax passed.
After all, what right-thinking elected official would ask for tens of millions of dollars more when voters just agreed to pay a penny-on-the-dollar more to generate $1 billion to fund the bus system and build roads and other projects? Some of the money generated by the new sales tax would be used to make improvements in areas included in the proposed new tax districts.
But now that voters have given city and county council members a billion-dollar gift, it doesn’t appear that the elected officials intend to return the favor. County Council voted last week to give initial approval to the two proposed tax increment financing districts and City Council, which tentatively approved the districts in August, will consider a final vote today.
We can only hope that these councils come to their senses and, along with the Richland 1 school board, ultimately vote to reject the proposal to divert up to $110 million — $40 million in north Columbia and $70 million in USC’s Innovista — from countywide and citywide services to fund improvements in those designated areas over 15 years.
As we have noted, City Council’s revised proposals improve the original plans in that they wouldn’t last as long, wouldn’t require as much money, wouldn’t consume 100 percent of all new revenue and would be closely monitored. But even if the penny-on-the-dollar tax had not passed, these special tax districts wouldn’t have been a good idea. It’s unwise to set up special districts that siphon tens of millions of dollars away from basic services to pay for speculative projects.
Although TIFs don’t cause general tax increases, they unfairly shift the burden for paying for city, county and school services to property owners outside the districts. Also, they unfairly obligate future elected officials by tying up new tax dollars for years to come.
It’s understandable that the city wants to help prime the pump at USC’s research campus; if successful, it would dramatically change this region’s economy. We also understand the desire to help improve the north Columbia corridor, which long has been neglected. But this simply isn’t the way.
While we oppose the TIFs, we remain intrigued by an idea Mayor Steve Benjamin said he is working on. After he and Councilwoman Leona Plaugh voted to oppose the TIFs in August, the mayor said he was working on an alternative financing plan to lure private investors to Innovista and north Columbia. The idea, not yet fully formed, would involve using the city’s $180 million in reserve accounts to install water and sewer lines, streets and other amenities on a project-by-project basis; property taxes would reimburse the city’s reserves.
We still need to see the details, but the notion of paying for projects as you go rather than locking up future revenue for years and having no flexibility in its use makes far more sense.
As for the TIFs, County Councilman Seth Rose said it best: “With the citizens approving the penny sales tax, I think this is over-reaching.”
We agree. This money grab would be a slap in the face to voters.
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