Thursday, January 18, 2007

in a tif

A few years back, I wrote a major take-out piece on Wesley Fields, who was running for City Council. In many ways, I'm ashamed of the piece. At the urging of Steve Glorioso (who was working for Fields's opponent, Becky Nace), I really went all out and dug up every scrap of dirt I could and I put it all out there. Some of the stuff -- the stuff Glorioso tipped me off on -- was really insignificant, and probably wouldn't have amounted to much if Fields were white, or if his opponent weren't a white woman.

On the other hand, the meatiest stuff in my exposé, the stuff that got me interested in him to begin with, was that as an attorney at Bryan Cave he was one of the main lawyers representing the TIF Commission. And, it wasn't long after I moved to Kansas City that I learned that TIF (short for Tax-Increment Financing), is one of the biggest scams in the city, so it raised a red flag.

A lot of people think TIF is boring and confusing, but it really isn't. Anyone who cares enough to vote understands it in principle. Basically, it's an incentive to develop areas that are difficult to develop. That's the theory, anyway.

It's like this. Imagine you buy a falling-down shack. Taxes on it are low because it ain't worth squat. Well, as an incentive to get you to fix it up, the City offers to freeze the taxes at the worthless level. Then they figure out how much your property will be worth after it's fixed up, and they give that money to you ahead of time so you can fix your place up.

Sound like a good deal?

It's a hella good deal!

The problem I saw with this, though, was that it looked like most of these TIF deals were going to folks who weren't fixing up shacks. They were going to people who were developing farmland in the suburban Northland. People who wanted parking garages on the Plaza, which is the primo shopping district in the region. They were going to, in one instance, a gated community directly adjacent to the Plaza.

So, in my young and radical alt-weekly mind, it looked to me like institutional racism. More accurately, it seemed a social and economic justice issue, which, in an old Jim Crow town like KC, disproportionately impacts blacks. I didn't say that in the article, but I said it to folks behind the scene, in particular those who accused me of embarking on a racist attack on a promising young black candidate. (To which I now say, guilty -- at least on the Glorioso-inspired parts.)

But with regards to the real substance of the story, I was on point. When it comes to a lot of his work at Bryan Cave, Fields was (is?) a tool for what might well be Kansas City's most egregious injustice.

Because now there's proof!

There's no other way to say it: This report is a damning indictment of Kansas City.

We all ought to be ashamed of ourselves for letting this kind of enrich-the-rich graft take place on our behalf.

Check this out:
88% of TIF plans are in four Council Districts (1, 2, 4, and 6) which contain the two-thirds of the city’s population who are the most affluent, best educated and least likely to be members of a minority group.

The two Council Districts (3 and 5) with one-third of the population who have the lowest income and the highest rates of poverty and unemployment receive only 12% of TIFs.

Do you need further explanation?

It says: A program for poor neighborhoods is being used for rich ones.

Now, I remember Fields's argument in defense of TIF being used this way. It's the same as Mayor Barnes's, which was dutifully transcribed this week by her stenographer:
“Neighborhood concerns and economic development are bonded together,” she said. “You don’t have to pit one against the other.

“To address neighborhood and social concerns, you need to generate economic development to do it. The other option is raising taxes.

“Be alert to anyone sending a message: ‘We’ve done enough economic development and we need to focus on neighborhoods.’ We can do both.”

Here "economic development" is code, in part, for TIF. And "neighborhood concerns" is code, in very small part (at least, I think, in her elitist mind), to the needs of poor people.

Yet, as Reclaim Democracy's report reveals:
The use of TIF and particularly the inclusion of (predictions of how much tax new developments bring in) has grown rapidly in Kansas City over the past few years. The amount of redirected tax revenues transferred to the TIF Commission has surged by 208% between fiscal 2000 and 2004. EATS grew by an equivalent 204%. That growth coupled with findings that actual revenues of TIF plans accounted for only 23% of projected revenues should create serious concerns among the citizens and elected officials.

In other words -- going back to the fixed-up-shack analogy here -- the predictions for how much money these new projects will bring in have been way, way off the mark. But developers still get the predicted windfall up front. And that money has to come from somwhere.

So where does it come from?

You guessed it!

Poor people.

Actually, it comes from all of us.

But, as you can plainly see when you drive across the districts where the fewest TIF projects are underway, it's the poor who can least afford it.


trAcy said...

you read fast!
: )
thanks for the summary. have document, am plodding through, along with housing recommendations document. . . .
where actually does the upfront money come from, budget-line-wise (semi-rhetorical question).

joe said...

It comes out of the budget. If you're working on a story, you should take the chart out of this TIF study, and put it next to the chart of payments toward deferred maintenance in the Chamber's report. They fit together like pieces in a puzzles. TIF projects go up, maintenance payments go down.

Anonymous said...

Aren't the TIFs that are backed by city bonds (like the Uptown/Valentine) the only ones where the money is upfront?