Tax Increment Financing districts may be a good idea on paper, but they rarely work as advertised. What TIFs are supposed to do is provide developers with an incentive to take on blighted areas by subsidizing new projects with sale tax cash. The municipal hope is that the long term revenues will more than offset that initial hit.
But it rarely works out that way. What typically happens is the mayor cons the city council into going along with one of his or her favorite contributors who’s suddenly supposed to pull off a redevelopment miracle. Not only do most TIFs fail to live up to their billing, but they end up costing taxpayers even more.
As an insightful Patch reader pointed out, if the real estate market would bear that new development, developers would’ve have rushed in to stake their claim without worrying about being underwritten by any of our money.
Though our Monday Patch column example centers around Geneva, the theory applies to all suburban municipalities. In the particular case, after the taxpayers subsidized his mismanaged Geneva on the Dam project (Route 38 and the river), now Kent Shodeen of Shodeen Management is coming back to the those overburdened folks by fighting his property tax assessment to the tune of $460,000.
Should he prevail, this will cost our schools and other local taxing bodies 40 grand which has to come from somewhere. And we all know this is just another form of double dipping.
Anyway, enjoy the column!