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  • Why TIF?

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    “I don’t want my taxes paying for that TIF project!”
     
    Truth be known, that’s exactly what TIF projects help prevent from happening.
     
    Numerous similar statements were made during two different public hearing processes on the recent blight study and redevelopment plan for the West “A” and Dixie Avenue area.  Some comments added confusion about how tax increment financing actually works, and what it “does” or “does not” mean regarding the use of local taxes?  Unless misleading statements are clarified, the general belief is “well it must be true.”
     
    We plan to run a series of short educational pieces in the upcoming Chamber newsletters as we continue to try and create a better understanding of the use of TIF.  Obviously there is a problem with its current perception in North Platte.
     
    Consider these facts:  North Platte currently has only 3 TIF projects on its active list (Hobby Lobby will also come on the books later this year).  Compare that to our two closest sister communities – Kearney and Hastings.  Kearney has 22 currently active TIF projects.  Hastings has 23.  Both are growing their population base and economies.  They are kicking our butt in the creation of new housing units.  For instance in the past 10 years Kearney built 2,139 housing units.  The North Platte area built 407.  It has certainly helped Kearney drop its overall tax levy to $1.83, which is a reduction of 25 percent in the past four years.   North Platte’s is $2.11.
     
    North Platte was the only one of our sister communities in Nebraska (Kearney, Hastings, Norfolk, Fremont, Columbus) that lost population in the recent mid-decade census estimate that came out measuring the 2010-2014 time line.   In 1980 North Platte was the largest of those six communities.  Today it ranks fourth and may soon slip to fifth.
     
    We can do better.  We must do better.  The Shot in the Arm primed the pump.  The recent blight designation will accelerate housing efforts even more. We’re making progress.
     
    The public hearings generated a healthy exchange of dialog on the use of TIF.  A lot of the testimony, however, is personal opinion.  No matter how you explain TIF, some will always be philosophically opposed to it.  We respect that.   By contrast, the positive developments that have been created as a result of using TIF across Nebraska communities over the past 30 years, simply cannot be ignored.  There are currently 765 active projects. Yes, there are a few bad TIF projects, but the vast majority did what the respective developers said they were going to do…..and then some.  The results are in brick and mortar and sticks and stones.
     
    The best way that we can describe TIF, is it allows a community to create “something out of nothing.”  Every community – no matter how big or small - struggles to find the resources to make things happen on the economic development level.  There’s only so many ways the public dollar can be sliced to accomplish the needs of a community.  Most citizens don’t want to raise taxes to do it, so consequently we need to be creative.
     
    If a community wants to be competitive with its peers in the recruitment of projects and people and growing from within, it has to be resourceful to find the key tools in the development tool box.  Perhaps the only two REAL local economic development tools that are available is the Quality Growth Fund created by LB840 and the ability to use tax increment financing.  If you want local control – that’s where it’s at.
     
    The 130 acres included in the recent blight designated area around West “A” and Dixie Avenue is a prime example.  There were approximately 15 major issues identified in the study with the existing infrastructure and lack of public improvements.  These improvements must happen, IF the area is ever to reach its growth potential.   Absolutely those improvements could be accomplished by 1) private sector developers willing to risk losing money on projects to fix the problems, or 2) rely on ALL existing city taxpayers and rate payers to pay for the improvements.
     
    Because this area is already in the city limits, it could be argued that some of the long term deficiencies are the obligation of the city to correct. Instead, many of those improvements can happen and deficiencies corrected by incentivizing the private sector developer to share this “fix it” burden by allowing the new project’s increased taxes – NOT THE EXISTING TAXES – to be captured for a short time to pay for the public improvements.  Yes, it will help the developer absorb some of the project’s infrastructure costs, but additional dollars will also help improve the existing deficiencies.  For every city dollar saved by TIF paying for the public improvements, it then allows the city to use its resources on other projects.   Everybody wins.
     
    Eventually everything created by that new development will be fully on the tax rolls.  In the meantime many, many positive residual impacts will immediately occur.
     
    If over time, 200 living units can be created through new projects it will add about 480 people to the community (using the average per capita of a housing unit in North Platte).  Those 480 people will spend their money here, most of it in the local economy.  Employers can fill more open jobs in our labor strained market.  It will help those employers reach their potential.  Eventually millions of dollars of new valuation will be added to the tax rolls and huge improvements will be added to a growing area of North Platte.
     
    “I don’t want my taxes going to pay for that TIF project!”     That’s our point exactly.  
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