Jobs, housing and neighborhoods all benefit when cities invest in economic development for the right reasons and in the right ways, a public finance policy watchdog said this week.
By William Crum May 23, 2015
Executive director of Good Jobs First Greg LeRoy said TIF projects done well can revitalize economically distressed neighborhoods, set them up for future growth and work in concert with other government efforts to fight poverty, crime and other urban ills.
Greg LeRoy is executive director of Good Jobs First, a nonprofit that advocates for accountability and transparency when it comes to economic development subsidies backed by taxpayers.
He came to Oklahoma City for a town hall meeting on tax increment financing, or TIF, hosted by Ward 2 Councilman Ed Shadid.
In an interview, LeRoy said TIF projects, done well, can revitalize economically distressed neighborhoods, set them up for future growth and work in concert with other government efforts to fight poverty, crime and other urban ills.
“In the best of all worlds, you want a win-win-win structure here where you’re getting whatever your needs are met — whether you need job creation, or affordable housing, or neighborhood revitalization, or some of all of the above,” LeRoy said.
How do TIF districts work?
He said tax increment financing produces two tax “streams” — one derived from the existing base before public investments produce rising property values and a second, known as an increment, that reflects raises in property values.
The first stream supports government services, such as libraries and public schools, at pre-TIF levels.
The second stream is diverted, in Oklahoma for up to 25 years, to subsidize redevelopment.
“One of the reasons public officials like TIF so much is that it can be used for lots of different things. A lot of public officials call it the ultimate flexible tool, and it’s really a sacred cow,” LeRoy said.
He said Oklahoma City has nine TIF districts — areas from which increasing tax revenue is captured for redevelopment — with more in the works. He urged caution in making sure deals produce the best results for taxpayers.
“I think you’re on the brink of doing some big deals, so it’s a cautionary time, it’s a time to pay a lot of attention to this and try and get it right and make sure you don’t overspend,” he said. “In other words, don’t do deals that amount to windfalls.”