by William Skink
UPDATE: how MRA compensates the private sector seems more complicated than this post reflects, see comment section.
In yesterday’s post about the Mayor losing the narrative on TIF and the role of the Missoula Redevelopment Agency I used the Missoula Current as the source of Engen’s quotes, but in the Missoulian today more of what Engen said to the MRA board is being reported:
Engen said he hopes to launch some sort of public relations campaign to extoll the benefits of Tax Increment Financing.
“There is considerable noise around TIF and considerable misunderstanding in the community about what TIF does and the purpose and reason we have redevelopment districts,” he said. “We’re doing some work to help folks better understand that. There’s a fundamental misunderstanding that we’re just, we’re giving money to the private sector.”
Engen feels that isn’t true, and hopes to convince people otherwise.
“We’re producing some explainers that will help folks understand that we’re actually creating public infrastructure that supports private investment, that creates taxable value, that expands our base that allows us to levy fewer mills to tax individuals less and to get more done. This is a success story at the end of the day and I think we have an opportunity to share in that success,” he said.
A public relations campaign? Are you kidding me? What is that going to cost? And where will the money come from? Is the Mayor off the wagon?
I guess Mayor Engen doesn’t like that the public is starting to think critically about how MRA uses the tax revenue it siphons from Urban Renewal Districts. Instead of acknowledging that critics have legitimate concerns, it looks like Engen is going to take the linguistic smoke-screen route in an attempt to re-obfuscate what’s going on.
When Engen states that MRA doesn’t “give” money to the private sector, he’s technically correct because MRA is not cutting a check to the Marriott directly for a million plus dollars. But Engen’s perception management here is really just a linguistic shell game. If MRA wasn’t paying for things like sidewalk improvements, then the project would be on the hook for those costs because there are building codes and those can be enforced.
Saving the private sector these costs means the private sector makes more money on these projects. It is NOT a direct gift, but it IS tax money that goes to increasing the profitability of a project. Engen can try to pull a Bill Clinton by getting all shifty with defining what “give tax money to the private sector” means, but it’s not a strategy that’s likely to work.
I’m sure other aspects of this coming PR campaign will include explaining what the public gets in return for their TIF investment, things like nice sidewalks and no more above-ground electrical lines and jobs and more restaurants with dude’s who want to call South Broadway SoBro.
But other arguments may get omitted, like how none of these projects would happen without that sweet TIF infusion. Missoula is booming and trying to become Bozeman 2.0 with a slobbering, red-carpet roll-out for tech, and then there’s a chance the University is slowly turning the corner. With all this success, have Urban Renewal Districts done their job and now need to sunset?
Another thing I’ll mention before wrapping this post up is the conspicuous silence of MRA director, Ellen Buchanan. Last year, when Engen tapped the MRA piggy bank, Buchanan said she hoped it would be a one-off patching of the budget. I wonder if there’s some frustration that, feeling the political heat with an upcoming election, Mayor Engen is back this year for more so he can brag about mill levy voodoo and rainy day funds.
Missoula could have some interesting political developments this fall. Stay tuned.
I’m not so sure that the city isn’t cutting a check to Marriott and Missoula Investors LLC for their projects. When you read these two articles, one for the Merc and the other the AC, it says that in the case of the Merc, once the work was done, they sold bonds to reimburse Marriott, and will do so for the AC:
It would be interesting to actually see how the money is disbursed to the developers. To me the reporting (unless it is super sloppy) indicates direct pay to developer.
a bond as payback does seem a bit more direct than my sense that MRA some how directly covered specific costs, like sidewalks and burying utility lines. seems there is much more to discover about how things work. poor Engen, I’m afraid all that noise he is hearing will continue.
And to counter Engen’s upcoming propaganda crusade, I think this point needs to be clearly hammered home:
TIF caps the taxable value of a property before development and any increase in property values after the development occurs will result in the increased tax payments going to the TIF fund instead of the general fund.
But of course, every development project incurs increased costs on public services: policing, fire dept. and EMT services, schools (in the case of housing development), etc., etc. And if the development does not contribute any more tax payments to the general fund to cover these public services for many years, then the public, city-wide, will have to pay for those services through increased taxes.
So it really comes down to the fact that the TIF system is responsible for a significant part of the increase in property taxes in Missoula. It would be good for the public to know exactly how much money MRA siphons from the general tax base to subsidize private development. And how much their taxes have increased to cover the subsidy (or “skim and give”).
And of course Engen will only tell the one side of the story — his perceived public value of the subsidy — instead of how taxpayers are being duped into paying for the basic public services the projects incur.
And don’t get me started on the Parking Districts piggy bank slush fund that it uses to subsidize parking for the same TIF-funded projects.
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