by William Skink
Critics of how Missoula (ab)uses Tax Increment Financing have been consistently depicted by local media and elected officials as being deficient in our understanding of this oh so complicated financial tool.
I submit the problem is the exact opposite: we DO understand how public money is being redirected from the general fund to an agency comprised of people we didn’t elect, who then decide how this public money is used.
Since last October’s announcement that Lord Checota was swooping in to save the River Front Triangle project from collapsing, and that it would take 16.5 million dollars in public money to make this 100 million dollar development project “pencil out”, a surge in public engagement around this topic quickly developed.
For a Mayor who deliberately moved up the vote on this latest proposed TIF handout to a wealthy developer in order to “get ahead of the rumors”, this new level of scrutiny was not appreciated.
After the Riverfront Triangle project got the green light from Council, another proposed condo development on 4th street caused even more members of the public to question how their elected leaders were choosing to interpret and implement Missoula’s growth plans (plans funded by public money to out-of-state New Urban pushers).
The controversial development projects and increased public scrutiny caused Engen and his cronies to lose control of the narrative around the (ab)use of TIF money. Then, in early February, everything got more serious when a decorated veteran and TIF critic, Brandon Bryant, was thrown in jail on a felony charge of threatening public officials.
Now the Missoulian is trying to do its part to get the gravy train chugging along like normal again with an op-ed in today’s rag, titled Missoula needs to get TIF discussion back on track. From the link:
There’s a growing disconnect between Missoula’s leadership and certain critics of an economic development tool known as tax increment financing.
Some residents feel strongly that local government should be doing more to reduce their property tax burden. While there is a lot of support for tapping into other sources of revenue — such as through a gas tax or a sales tax — others would prefer that the city start by cutting its spending. In general, this view is represented on the City Council by a minority coalition of councilors: Jesse Ramos, Sandra Vasecka and John Contos.
The Missoulian is trying to push TIF criticism into the liberal/conservative binary, which is problematic for a number of reasons, the main one being that critics of TIF aren’t simply property owning conservatives who seek to blithely cut taxes. Spend five minutes speaking with someone like Kevin Hunt, a very articulate member of the public, and you will quickly realize critics of TIF come from different political backgrounds.
The op-ed continues:
For their part, the majority of city councilors find themselves defending their budget decisions, and TIF in particular as a valuable economic tool that pays big public dividends, while also trying to dispel persistent misunderstandings about how it works.
The same arguments seem to flare up every time City Council votes to approve TIF funding for a major development. TIF opponents don’t feel heard. TIF supporters don’t feel understood. And around and around it goes.
What are these “persistent misunderstandings” the Missoulian is referring to? Being more specific here could help, you know, like, maybe, um, I don’t know, ACTUALLY ADDRESS those persistent misunderstandings.
I think the writers of this op-ed are adding to the confusion when they state that city councilors “find themselves defending their budget decisions“. The problem here is the fact that city councilors aren’t the ones actually making the decisions about where TIF money goes, the people hand-picked by the Mayor are making those decisions.
A lack of accountability with these unelected decision makers directing public money is one of the problems TIF critics like myself have pointed to, and it’s a problem the Missoulian is not doing its part to better explain to its readers.
TIF is a complicated public finance method used by thousands of communities large and small throughout the United States. It has undeniable benefits, but also some real flaws. There’s a lot of room for misunderstanding and disagreement, and other cities besides Missoula have long grappled with how to address TIF’s various defects, both real and perceived.
But in Missoula, a long-simmering conflict went completely off the rails recently after one vocal city critic was jailed for making death threats in a video posted on YouTube this past December. The man, Brandon Bryant, is a U.S. Air Force veteran with a cadre of supporters working to free him — and worried that his arrest has a chilling effect on other critics of city leadership. Yet some members of City Council have themselves advocated on Bryant’s behalf, even as they acknowledge that threats of violence are inexcusable.
City Council’s next steps should be to form a united front and reassure the public, especially those with bones to pick, that councilors welcome civil criticism about TIF or any other municipal business. Then, they must join with the city’s administrative and economic leaders to get this discussion back on track. Public support for TIF will be key to making improvements that promise to mitigate concerns on both sides.
Things will not get “back on track” while Brandon Bryant sits in jail facing felony charges. Anyone who thinks that is a possibility at this point needs to get their head checked.
If the County Attorney’s office chooses to continue with the prosecution of Bryant, the conversation Councilors should be having is with their legal representation. They should be doing things like preparing to provide Bryant’s public defenders with all their relevant emails and preparing to testify, under oath, about how afraid they are of sticks, metaphors and words taken out of context by a third party.
But the Missoulian and all those poor developers who just can’t get things to pencil out sans public TIF sweetner are eager to get back to business as usual, so here are some helpful ideas the Missoulian is tossing out there to get the gravy train chugging along:
A 2018 report titled “Improving Tax Increment Financing (TIF) for Economic Development” provides an instructive overview of TIF programs from Chicago to California, and even includes a case study in Montana’s Jefferson County. The report, by David Merriman for the Lincoln Institute of Land Policy in Cambridge, Massachusetts, examines the potential benefits and pitfalls of TIF, and concludes with a short list of recommendations.
One of the recommendations is to increase state oversight of local TIF programs. We don’t agree. Montana’s legislators, especially those in more rural communities that have no experience with TIF, have proven reluctant to allow for more flexibility — one of the recommendations in the report. Flexibility is key to freeing some of the money created by TIF district for public projects of arguably higher priority. In Missoula, housing affordability and energy sustainability are two areas where TIF has enormous potential to provide enormous public benefit.
No amount of flexibility will change the structural problems that urban renewal districts produce by redirecting the increase in tax revenue to the Missoula Redevelopment Agency instead of the general fund.
No amount of flexibility will change the fact that the people who get to decide what to do with this money were never vetted by the voting public, and if the public doesn’t agree with their decisions, what recourse do we have to replace them with someone better suited to ensure there is a public benefit to how TIF money is used?
After cheering on the few housing projects to receive TIF money in Missoula, the op-ed continues with this:
Awaiting action in the Legislature, the city continues to seek creative ways around these limitations. It has twice pulled money from TIF districts to bolster the general fund, and in doing so avoided raising property taxes. Indeed, TIF reduces the overall tax burden of property owners, because it creates money that otherwise wouldn’t exist.
This paragraph makes no sense to me. First, the admission that money can be put back into the general fund seems to indicate THERE IS flexibility to “bolster the general fund”.
But why did the general fund need bolstering in the first place? BECAUSE THE GENERAL FUND IS BEING STARVED OF TAX MONEY!!!
How can the op-ed writers then turn around and say “TIF reduces the overall tax burden of property owners because it creates money that otherwise wouldn’t exist?”
Maybe the thinking is that way down the road, when all these urban renewal districts sunset decades from now, the expanded tax base will finally allow our elected leaders to lower property taxes.
This is just trickle down economics in different packaging. It was bullshit when it was being peddled by Reagan, and it’s bullshit now, peddled by the Missoulian.
Here’s more bullshit:
For example, the Mercantile property was vacant for several years while various plans were proposed and found to be poor fits. Now it is home to a private development that includes a Marriott hotel, as well as several shops and restaurants. And it is surrounded by upgraded public infrastructure — $1.9 million in TIF reimbursements for new sidewalks, lights, trees and utility lines. That money comes from the increase in taxable value caused by an increase in property value.
And that increase in taxable value will be going to the Missoula Redevelopment Agency, NOT the general fund.
Similarly, the proposed $16.5 million in TIF for an event center at the Riverfront Triangle, which has been vacant for decades, would leverage the private investment in that property in order to provide for public facilities. Sure, the development could conceivably go forward without it — but these five riverfront acres are critical to connectivity in one of the busiest parts of Missoula, and it would be a shame to turn down an opportunity to dramatically increase public enjoyment of this key asset.
Yeah, a real goddamn shame to let this opportunity pass by. But the public will surely enjoy this key asset IF they can afford the price of a ticket and IF they can afford the price of a swanky hotel room and IF they can find parking and IF there are enough hourly wage slaves to serve them.
The Missoulian concludes with a final recommendation which amounts to putting out more readily digestible propaganda regarding how great the Missoula Redevelopment Agency is and how lucky we are that they are transparent with their information:
Another of the recommendations of the TIF report involves providing “extensive, easily accessible information about TIF use, revenues, and expenditures,” and Missoulians can take pride in the fact that the Missoula Redevelopment Agency is as transparent with this information as it’s possible to be. Its revenues and expenditures — and whole lot more documentation — are readily available online, and regularly updated.
The challenge is in distilling all this data for those who don’t want to spend all day going over minute details.
It will be challenging for the Missoulian to help the Engen regime return the pesky public back to a state of uninformed complacency.