Is a widely used tool for economic development providing the return on investment often promised?
One elected official says “no” and seems to have a study that agrees with him.
City Councilman Jason Arp (R) is scrutinizing Tax Increment Financing in an op-ed published today in the Journal Gazette.
Under the public financing method, an eligible city district can set aside an incremental tax value for projects that encourage area improvements.
In the article, Arp says TIFs are anything but an investment. Arp suggests TIFs will cost Fort Wayne 75 cents on the dollar in the long run.
He says TIF use statewide has grown immensely, without any oversight, and that there’s no ledger of the dollars put forth or the returns.
The comments come after Indiana Policy Review, a state policy think tank, published a study of economic development activity by municipal and county governments. Read the full report here.
Councilman Arp contributed an in-depth analysis of Fort Wayne and Allen County to the publication.
We caught up with him at tonight’s city council meeting to make sense of it all.
So what we’ve worked on is providing a summary analysis of all the spending that we can track for the last 11 years.. and what the resulting changes in assessed values and population growth over that period has been, to see if there’s been a return, and unfortunately the data shows there really has been no return on investment for all those dollars that have been spent.
Arp says TIF districts have shown a tendency to diminish the tax base of the areas they serve and that when projects funded don’t pan out, the municipality is left paying the bonds.