OUR VIEW: TIF proposal is good idea for MitchellAnother TIF district is before the Mitchell City Council, and we think it’s a project that deserves approval.
By: Editorial board, The Daily Republic
Another TIF district is before the Mitchell City Council, and we think it’s a project that deserves approval.
Monday, a city planning commission gave preliminary approval to a new TIF, short for a “tax increment financing” district. A city TIF review committee also has given preliminary approval to the proposed project.
The district would help fund a business expansion and proposed business park on the city’s northwest side, along the curve of the Highway 37 bypass.
TIF financing is a method government entities often use to pay for public improvements or other incentive costs to attract a private developer into a defined redevelopment area.
In a TIF district, taxes collected on the current property value continue to be used in the same way as they were before improvements began. As the property increases in value during the length of the TIF, the money collected on the higher value — the increment — is used to pay for public improvements in the TIF, such as streets. TIFs remain in effect for an established period of time, in this case 20 years.
In a TIF district, development is encouraged; after the development is paid for, the new and higher property taxes sparked by the development go onto the tax rolls, to be used by local governments.
TIFs have been used many times and to great effect in Mitchell, for and around such projects as Graphic Packaging, Home Federal Bank and Verifications Inc.
Some people don’t like TIF projects, saying they’re a method used by bigwigs to pay for their large projects. Another criticism is that the taxes generated by the TIF are diverted away from local governments until the TIF expires.
However, we see it as development and civic progress, pure and simple. Whereas the businesses that grow from a particular TIF district benefit from their own property taxes for a certain time period, taxing entities — such as the city, county and school district — really aren’t out anything, because the new and higher taxes in the TIF district weren’t there to begin with and might not have materialized without the TIF.
Translation: You can’t tax what doesn’t exist today. It’s better to have something to tax a few years down the road than nothing at all.
If approved, the proposed area — officially TIF District 16 — along the bypass will aid an expansion of Innovative Systems, an existing business in that area that provides high-tech jobs. The expansion could mean the hiring of up to 30 new employees.
The TIF also could aid the formation of a new business park, which could help in attracting other businesses to town.
We like the idea behind TIF District 16 and hope the City Council gives its approval.