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Tax Increment Financing (TIF)

According to a recent news release, the Town of Avon will be funding its public improvement projects for the redevelopment of Avons Town Center with Tax Increment Financing (TIF) revenue.

When a public improvement project is carried out, there is an increase in the value of the applicable real estate and the increased tax revenues are the "tax increment." Tax Increment Financing dedicates that increment to finance debt issued to pay for the project. In other words the incremental difference is used to pay for the development rather than other town-wide public projects such as trails, parks and open space. Under current Colorado law school districts are not harmed by TIF as they are in some other states.

Every state, but Arizona has enacted legislation allowing Tax Increment Financing. Government entities prefer this type of tax because it does not require a general tax increase. In the case of Colorado it does not require a vote of the people like other taxes increases under Colorado law.

The original intent behind TIF was to level the playing field between economically distressed and more affluent neighborhoods by providing tax incentives to rebuild in blighted neighborhoods. However the definition of "blight" has become so lax that TIF can used as an incentive for developers in almost any area of most municipalities.
As TIF districts grow exponentially through out the country, groups such as the Neighborhood Capital Budget Group in Chicago are looking at them more closely. (http://www.ncbg.org/tifs/tifs.htm) The city of Chicago, which has used TIF for several decades, has about a third of its property tax revenue tied up in TIF districts. The City of Denver, according to the Front Range Economic Strategy Center, used approximately 7% of its 2003 General Fund Revenues to subsidize TIF shortfalls. General Fund Revenues are typically used to pay for standard municipal services such as police and transit.

TIF districts are usually implemented in the hope of spurring on more economic development. Sometimes this is successful, however, recent studies in Texas and California have shown that sometimes economic development does not always grow city-wide but may only move from one part of a city to another. This can have a negative impact on small business in other areas outside of the TIF district. One of the other potential downsides of TIF districts is the they change the character of a neighborhood and drive up property values to the point that existing residents and businesses cant afford to stay in that area.

Tax Increment Financing is a way for governments to borrow money to pay for improvements now based on the hope of future revenue rather than rather than letting growth naturally pay for itself. In other words it works like a credit card for the government.

As with credit card debt, there is potential danger in tax increment financing, and municipalities as well as the taxpayer should be wary of it.

Being green starts at home

Sustainable development and sustainable community are the new buzzwords being used by our local governments. Sustainable development is more than green building because it encompasses the environmental considerations of Green building, along with economic and social considerations.

Sustainability is defined as a development or community that can be maintained at a certain level indefinitely. The idea behind the buzzword is to preserve the world for the future. In theory, sustainability should be a common sense, balanced approach to development and the environment.

Taking care of our environment, locally or globally just makes sense, and does not have to be overly complicated. There are some easy, common-sense ways to use less fuel and also save money on your heating bills.

For example, seal up leaky drafts around doors and windows with weather-stripping. Its not hard to do yourself and it does not cost a lot of money. Keep your drapes closed at night to help insulate your house. On sunny days, open up the drapes and blinds to let in the sun's free heat. Shut off the lights when no ones in the room.

These are all examples of common-sense solutions that my parents and grandparents used to keep their fuel bills lower. I doubt that they used the term "carbon footprint," but the energy saving results helped the environment and my family's economy.

Do we really need to waste our money on "studies" and grand plans to be sustainable? Heating sidewalks is not environmentally sustainable and will increase our carbon footprint as a community. Do we need a study to realize that? On the other hand the economic pay-off may sustain the community economically by making our county more attractive to guests. These are choices that have to be made; no amount of money wasted on studies will make the choice easier. In the end it is about finding a balance between caring for people and caring for the planet.

On an individual level, we have to make choices, too. How important is the concept of sustainability to us as a community? Sustainability sounds very desirable when we hear our government talk about it. But are we willing to make our own difficult choices? Are you willing to pay more for your housing (buying or renting) if it means using less energy? What if that means getting a second job? Are you willing to use public transportation instead of your Land Rover? How about some easier choices like making that extra trip to the curb with your recycling when it is below zero?
The point is that a truly sustainable community starts with all of us taking individual responsibility for our environment and each other. We should not leave all the sustainable community choices to the politicians who attend meetings in Bali or to the local politicians. I do not want the government to limit my personal freedom of choice by forcing me into the governments idea of a sustainable community. Nor should we give up our personal freedom to come up with more creative solutions.

Sustainable solutions that really work will come from individuals and business. The reason for this is that sustainable choices make economic sense in the long run. We need to give people and developers freedom to come up with creative sustainable solutions instead of just doing what the politicians tell them to do.

We will also save some tax dollars that are being wasted on "studies."

There is an old adage that should be tied to the word sustainability  "Waste not, want not." This type of consumer frugality has gone out of style in our more affluent society. Maybe its time to bring it back.

Snowmelt does not make environmental sense

The town of Avon asked the Eagle River Water and Sanitation District to contribute $1.3 million to this project. Most of ERWSDs share of that money was for snowmelt in the parking lot of the Avon Waste Water Treatment Plant.

Snowmelt is not environmentally conscious and I object to spending the money to do something that I believe ultimately hurts the environment. Snowmelt systems impact the environment negatively by warming the atmosphere, no matter what the heat source.

Environmentally conscious decisions must be tempered with common sense. Spending our communitys resource for snowmelt in the Waste Water treatment plant parking lot is not my idea of common sense.

Timeline shows Bush, McCain warning Dems of financial mess

I want more for my money

Spending priorities may be different, but most people do not want to pay for anything, in the private or the public sector, unless they are getting their moneys worth. This includes everything from Open Space to paper towels. Why do you think the stores are a mob scene on the day after Christmas when everything is on sale? The average American consumer wants to get their moneys worth and would prefer a deal.

The successful businesses in the private sector understand this concept. If a local fast food place offered the exact same sandwich as its competitor across the street for two dollars more it would soon be out of business. The consumer would spend money at the business that offers the same sandwich for less money.

The public sector has a monopoly on some services that the private sector does not provide like road improvements, law enforcement, public safety and national defense. Historically, monopolies have been inefficient and hurt the consumer. This is one of the reasons the Federal government regulates monopolies in the private sector. On the Federal level, I believe we would have bi-partisan agreement that the Federal government has not become more efficient as our taxes have increased. So why should we start down that road of paying more taxes to the Eagle County government? Are we sure that the County government is using the tax dollars they already get as efficiently as possible, like private business?

If the County insists on keeping all that extra property tax money, we need to be convinced that we are getting our moneys worth from the tax dollars that are already being spent.

Does the County government use our tax dollars efficiently when it competes with the private sector, instead of partnering with local businesses? Does government cheat enterprising small businesses when it takes on services that belong in the private sector? One great example of this is the many parents who provide quality child care in their home, so they can supplement their income and spend more time with their own children. Government run child care hurts these businesses when it starts a competing child care center.

Another example is all the County and Town tax dollars that have been spent on economic development initiatives. Why not support the local Chambers of Commerce, but let the Chambers, not the County take the lead? The Chambers are the experts in this area, because they interface with the business community every day. I am sure they know how to proceed without spending tax dollars on new logos, endless studies and a make-over.

Its time to look more closely at what we are paying for with tax dollars that should be done in the private sector. The competitive environment of the private sector forces businesses to be more efficient. When a private sector business provides services the business pays taxes that fund necessary government services - like building better roads to improve traffic flow.

When the public sector takes business away from the private sector, it hurts the community twice. First, tax dollars are taken away from other higher priority items like public safety and roads. Second, it hurts small businesses that are providing these services, and they pay less in taxes as their revenue declines.

Government monopolies are never more efficient than the private sector, no matter if the business is for-profit or non-profit. Personally I would rather give more money from my pocket to local charitable non-profits, the local Chamber and other local business than to the County government. These organizations operate on small budgets and use my money wisely.

I am not blindly supporting the lowering of taxes; I just want to get my moneys worth from the taxes I am already paying to Eagle County, before they start taking more out of my pocket.