Albert Einstein is widely credited with suggesting insanity is doing the same thing over and over again and expecting different results.
Tax increment financing districts, better known as TIFs, are subsidies targeted for redevelopment, infrastructure, and other community-improvement projects. They long have been promoted as valuable tools for economic development.
But a recent analysis of tax increment financing districts in Indiana counties by Ball State’s Center for Business and Economic Research concluded they are an ineffective development tool for Hoosier communities.
In fact, the study showed TIFs are associated with less employment, less taxable income and slightly higher tax rates.
Obviously, those are not desirable outcomes.
TIF districts were created by the Indiana General Assembly in the 1980s and operated by redevelopment commissions. They were designed to allow local governments to redevelop distressed areas by making infrastructure improvements, such as new roads and sewers.
Another study focusing on Chicago’s swath of TIFs showed they have done little or nothing to boost the Windy City’s economy.
TIFs also present ethical problems by permitting leaders to provide specialized treatment. Developers securing tax increment financing gain an edge over competing developers lacking political connections, thus skewing the free market.
Business operates best when unencumbered by government’s “assistance.”
This was distributed by Hoosier State Press Association. Send comments to firstname.lastname@example.org.