Forum to present alternatives to tax increment financing
COLUMBIA - The Show-Me Institute, a Missouri-based policy organization, will hold a forum regarding state tax increment financing (TIF) on Tuesday.
Patrick Tuohey, the Western Field Manager for the Show-Me Institute, said he is concerned with how property taxes are redirected to project developers rather than assisting public schools, libraries, and city and county services.
The organization could suggest ideas for TIF reform in the forum, such as reducing TIF subsidies or creating more county-based TIF commissions.
“The problem in Missouri is that a TIF is rarely ever used in legitimately blighted or economic suffering areas,” Tuohey said. “I think there are a number of reform opportunities, and I am hopeful that the legislature will consider more of them next year.”
The forum will take place less than 24 hours following a city council work session regarding a TIF application in support of Broadway Hotel expansion.
If Columbia’s tax increment finance commission receives and approves the city council’s application, TIF support would contribute to nearly 10 percent of the $20 million project. The funds would help Broadway Hotel add a second tower and more meeting space.
Michael Trapp, second ward city council representative, said the Broadway Hotel project would offer several benefits to the city, including the potential to expand downtown, create jobs and reduce poverty within the African-American demographic.
“I believe that a downtown conference center and hotel expansion is going to be great for the city,” Trapp said. “It allows people to really get to see the heart of Columbia, and it accentuates value to downtown in a way that makes it worth forgoing those tax revenues.”
Tuohey said he thinks the intent for TIF planning is reasonable and said he is not concerned with the city council following legal standards for the Broadway Hotel’s TIF. But he does not think it is necessary to redirect public funds into the project.
“Judging by the application, I don’t see that there is a real need for public subsidy,” Tuohey said. “If this hotel expansion is a good idea, then the private developers should develop private land, and there’s no need for taxpayers to chip in.”
Trapp said TIF planning might present more concerns at the state level based on risks taken from Missouri TIFs outside of Columbia. He does not think Columbia is in a situation where it may need to risk city funds.
“If the project somehow doesn’t come to success, we’re not carrying any of that risk,” Trapp said. “If it is successful, I think we are going to see economic activity that more than compensates for the potential reduction in revenue.”
Tuesday’s Show-Me Institute forum will take place at the Country Club of Missouri at 7:30 a.m.
The organization will continue its forum, Missouri’s Misuse of Economic Development Subsidies, with presentations in Springfield and Kansas City before the end of the month.