Tax Increment Finance is the cause of the business-relocation musical chairs of the suburbs-exurbs. It is all about Lunds boats leaving the Anoka Business Park when the TIF well there ran too dry for Lunds. It is about business ventures playing one town against the other. In short, it is good for businesses that want to see individual homeowners pay higher taxes so that the business ventures can dodge a taxing parity.I am writing this for the homeowners already paying too big a share and facing the institution of a Pork Authority in Ramsey, i.e., for the homeowners who may have the capital chance to subsidize more at Town Center, rather than less.
A Pork Authority would be a whole new game in town, and we're number 6 already, on the list of those now TIF-gaming to the hilt.
Strib, Tuesday Nov. 28, reports:
Enough with the subsidies, Rogers' new officials say
Mike Kaszuba, Star Tribune mkaszuba@startribune.com
Last update: November 27, 2006 – 6:09 AM
Before Cabela's opened its doors last fall, the company was given as much as $5 million in public subsidies from the city. Still angry with that concession -- and others that make Rogers the leading city in Minnesota for public subsidies -- voters registered their displeasure three weeks ago by electing a slate of candidates who campaigned against the city's penchant for handing out public subsidies.
"They're still hopping mad about it," Paul Przybilla said of the Cabela's subsidy.
In January, Przybilla will become Rogers' new mayor after having successfully campaigned against the overuse of subsidies by this city of 6,000 residents on the northwest edge of the Twin Cities. Many businesses that got subsidies, he and others argued during the campaign, might have built in Rogers even without such support.
For more than two decades, Rogers has pushed the use of tax-increment financing, a complicated subsidy tool that channels property taxes from cities, counties and schools to help pay for the costs of the development, such as land acquisition and site preparation.
In the six years ending in 2005, Rogers led all major Minnesota cities in the use of the subsidy.
Twenty-seven percent of Rogers' total tax capacity, according to a study by the nonprofit Citizens League, had been captured by tax-increment financing during that period. [...] The average for the 54 largest municipal users of tax-increment financing was 9.5 percent, with Minneapolis at 15 percent.
[E]verything from Cabela's to Dairy Queen had received a subsidy.
For City Council Member-elect Steve Rauenhorst, enough was enough.
"There was a lot of -- I wouldn't say hostility -- but resentment on the idea the [city] was giving stuff away," said Rauenhorst, a laborer and another first-time office seeker. From now on, he said, "if people are expecting money when they come out here, sorry, it's not going to happen."
Przybilla, Rauenhorst and City Council Member Jamie Davis all won after stressing their opposition to public subsidies. They will form a new majority on the five-member council that already includes Scott Adams, a critic of the Cabela's subsidy.
At City Hall, the fallout from the election has already stirred a debate of what will happen next, and whether Rogers went too far in offering subsidies to businesses. Part of the post-election scrutiny has fallen on Gary Eitel, the 22-year city administrator and architect of much of the longtime public subsidy policy.
Eitel said Rogers' elections signaled a trend away from tax-increment financing that was already occurring in the city and elsewhere. Rogers, he said, had not created a new tax-increment development district in six years, and soon would be closing out three others.
But Rogers' record of giving subsidies, Eitel said, had over the years enabled a small city along Interstate Hwy. 94 best known for a truck stop -- Rogers had just 649 residents when Eitel began -- to blossom into a city with a tax base big enough to finance schools and parks. "I now have an industrial park that's 3 million square feet," Eitel said.
Well, they had to put up with their Eitel guy for 22 years, their City Administrator Eitel, and we've had our City Administrator James Norman (or Jim Norman if you want to be informal) for nine. And in that time, although we did not surpass Rogers, we did make number 6 - one of only six "TIF Towns" that tie up seventeen percent or more of the tax base as undertaxed - and if that seventeen percent is undertaxed we know what that makes the remaining 83% - that's right, 5/6 of Ramsey is overtaxed to make up for the TIF favoritism.
TIF favoritism applies for loan-brokered clients of a regional SBA loan brokerage that also has had a key person involved in advising Ramsey as, what else, a paid consultant. Right. Both sides of the street. An interesting question is who is on that SBA loan brokerage's board of directors, and under what terms and conditions. What would a thorough audit reveal?
Whatever an audit might additionally show, the table at the start of this post presents the Citizens League's totally impartial TIF Town data, the data tabulated and presented online by Strib.
Doesn't it make you proud to be able to be in the top six TIF Towns?
Look at all those fine high-paying jobs it's produced in Ramsey. My impression has been that businesses move in and largely keep intact their workforce that they had at their last location, but I could be wrong.
Am I wrong? Any Ramsey official or resident can post a comment about this, for clarity or for debate.