Tax Increment Financing (TIF) is a powerful and important development tool used successfully across the country. However, because it involves diverting millions of dollars in tax revenue from the public coffers and investing in private development it must be used responsibly. It is time that we take the investment of public dollars much more seriously and put our money to its best and highest use.
1. Invest Our Public Money Where it is Most Needed
The primary purpose of TIF, as stated in the State legislation that created it, is to provide temporary public assistance to a private developer to redevelopment blighted areas that would otherwise never seen any investment. However, we see all too often that TIFs are used to fund projects in areas rather difficult to define as blighted. Meanwhile there are neighborhoods in the City of Pittsburgh that haven’t seen development in years and would benefit by an investment of public dollars to create housing, office space, and infrastructure upgrades.
The Pennsylvania Tax Increment Financing Act of 1990 specifically states that any project receiving a TIF must prove that it will not happen without public support. Yet as recently as a few months ago, Pittsburgh City Council was asked to consider a TIF for a project whose developer said that they didn’t need the money and could move forward without it. A statement that puts the TIF request at odds with the State law. This wanton misuse of public money must stop and real standards and requirements must be put in place to make sure that your money is going to support projects that truly need it and will truly benefit the surrounding neighborhoods and the city as a whole.
2. Track Performance After Public Money is Invested
Big promises are made when a TIF project is proposed. Thousands of jobs will be created, vast expanses of public green space will be included, millions of dollars of new property taxes will roll into the city. We’ve heard it all before, but is there any evidence that it’s true? Do we even bother to follow up and see if it is? Unfortunately the answer is typically no. We must begin to closely track the economic performance of every project that receives public money. If the developer promises it will create 1,000 jobs in two years, then we must make sure that happens. If it doesn’t, there must be consequences. Your tax dollars are not a piggybank for private developers. You deserve to know how your money is being spent and you deserve a mayor who will take action if it has not been invested wisely or if promises have not been kept.