It’s funny, when you start digging around on the value of TIF’s the jury seems to agree, they have little economic impact. While I have found dozens of studies to prove this, the State of SD and the City of SF have yet to provide a study proving they work. We have been using them well over a decade. Shouldn’t we have data by now that they are effective? I can tell you why we don’t, because they know what the result of that study will be as this story points out;
“Tax increment financing is not a silver bullet solution to development problems. There is no guarantee that the initial public investment will spur sufficient private investment, over time, that creates enough increment to pay back the bonds. Moreover, even if the investment succeeds on paper, it may do so by “capturing†growth that would have occurred even without the investment. Successful TIF districts can place an additional strain on existing public resources like schools and parks, whose funding is frozen at base valuation levels while growth in the district increases demand for their services.â€
First off, as I have pointed out several times, we don’t have a ‘development’ problem in Sioux Falls. With over 6 years of record building permits, not enough workers to build these developments, and our out of control property tax and rate increases, the only ‘development’ problem we are having is TOO much growth, TOO fast.
There is also little evidence that TIF regularly provides the job or private sector investment that its supporters promise. Chicago is one of the largest users of TIF for economic development and its program has been one of the most widely studied. Research on Chicago’s TIF program found that “Overall, TIF failed to produce the promise of jobs, business development or real estate activity at the neighborhood level beyond what would have occurred without TIF.â€
We saw this with the stupid initiative Mickelson cooked up that thankfully failed to increase tobacco taxes to fund trade education. If TIFs are supposed to help create jobs, why aren’t the developers who are receiving these TIFs helping to pay for the education and a living wage? You would think with the HUGE tax rebate they would be using that money to build a better educated workforce, instead they are only short-changing public education by sticking the money straight into their pockets.
If TIF is going to be used it should be used on things like public infrastructure – roads, sewer/water lines, sidewalks – rather than specific private businesses. This makes it harder to get distracted by non-pecuniary factors and does a better – though not perfect – job of directly helping development in general rather than a specific company or private developer. But taxpayers should be aware of the dangers of TIF and politicians and developers should not tout it as a panacea for jump-starting an area’s economy.
And with the Circus performers we have on our city council now, a TIFiliscious Revolution in Sioux Falls scares me even more. End the developer welfare programs. Eliminate TIFs, not only in Sioux Falls but the entire state.
If anyone has been paying too much for NEW infrastructure and development, it has been the tax payers of Sioux Falls. When the 2nd Penny sales tax was raised to a full penny over a decade ago to fund infrastructure expansion, the promise was developers would put in 40-60% into that fund in platting fees. That hasn’t happened, not even close. In fact, taxpayers at one point were putting in over 10x more into that fund then the developers.
Well apparently some developers are now crying the platting fees are too much (about $20K per acre on vacant lots in undeveloped areas). Sioux Falls City Councilor Greg Neitzert talked about it in a recent post on his Facebook page. He seemed to be sympathizing with the developer because they used the tired old excuse that they pass those prices to the consumer of the new development. Well duh. The consumer is getting brand new sewer, water, and roads, why shouldn’t they pay the cost? How is charging me extra in sales taxes fair? What do I get out of it except higher taxes and water/sewer rates?
In about 50% of US cities with populations of 25K or more they charge the developer a 100% of the cost of new development infrastructure, so current users are not subsidizing new growth. This makes sense, because as I have often argued, new growth without a plan to pay for it, makes no sense. Slow growth that is properly funded is fiscally responsible to taxpayers. When developers don’t have enough workers to build their developments, that should tell us that maybe the ‘growth’ isn’t needed. Who are you building and expanding for?
I think we should eliminate platting fees all together and have developers instead pay for the entire cost of new infrastructure. If the NEW development is really truly needed, it will pay for itself. That’s just common sense.
Sioux Falls City Council Invited the Brandon City government over to have dinner and conversation on December 20, 2018. Most of each Council showed up for a nice dinner in front of our cameraman Bruce.
As the only public, guess who was the only one to speak (tough guess for ya, right?). The night’s topic was regionalization of resources. Its about time and its about the right thing to do.
Let’s start with yesterday’s informational meeting (Above). I tried to watch the meeting online but was unable to when it was in process, so I showed up in person towards the end. The city informed me they were having issues with some old software so were not able to live stream. It seems all the patchwork the last IT department did is causing issues. Get out! SIRE has been conveniently broken for over a decade, and while that isn’t the new guy’s fault or the current administration, it needs to be fixed permanently and that is on them!
LODGING TAX DOWN 32% from last Year
They did have presentations I was able to watch later. During the November Finance Report I noticed that the lodging tax is down around 32% from last year. While this only affects the CVB’s BID budget, it should be concerning for the city (economic impact). Even if the tax collection was down just 1% we should be concerned. With all the growth in entertainment and lodging options in Sioux Falls, that big of a drop should really be investigated. I’m not sure if it has to do with the popularity of Air B & B, the economy or pricing, but something is way out of whack.
IS THE 85TH EXCHANGE GOING TO BE TIF’ILICIOUS?
There was also a presentation on the 85th exchange. While I was happy to hear about a large private investment, and investments from Lincoln County and the State, I’m still waiting for the TIFilicious discussions to begin. You wait, it’s coming.
5G NOT DISCUSSED PUBLICLY
They finished with a presentation on the Verizon contract when it comes to 5G. After reading the contract, you can almost guess who wrote it (Verizon and the Feds).
During public input I mentioned the problems with SIRE over the past decade and Rick Kiley asked the chair to keep me back on track with agenda items. I told him it had to do with the agenda, since I couldn’t watch the presentations. Either way, as long as I am discussing city business I really don’t care what Kiley thinks is ‘appropriate’. Those five minutes are MY TIME not his, and if he doesn’t like what I’m saying he can leave the room. I think it is disgusting and pathetic that we are only afforded limited time anyway, but to have a city councilor interrupt me because he didn’t like what I was saying is disrespectful. Seems Rick wants to carry the torch of Rex and Mike when it comes to interrupting citizens during public input, and I’m not going to put up with it. He has been on the city council for over 6 years (as well as chair Erickson) and they are very well aware of the problems with SIRE and choose to have an ‘ignore the problem’ attitude. If you don’t like me pointing this out Rick, maybe you should get off your butt and do something about fixing it instead of trying to kill the messenger for pointing out your failed attempts.
I also commented that while I don’t have a problem with the provider of 5G in SF (Verizon) I was dismayed that there was no public discussion. I also reminded them that our Home Rule Charter gives a lot of power when it comes to regulating the public utilities. I said, “While we find it okay for our charter to dictate to private property owners how long our grass can be, we say nothing when the feds come in and tell us what to do.†I’m also curious why the State PUC hasn’t weighed in on the topic, and if they have, I would like to see some minutes of those meetings.
POLICE FOP GETS UNION CONTRACT FLOPPED ON THEM
During the regular city council meeting (Above) they approved the FOP SFPD Union contract on a 6-2 vote but not after a Union member ripped the new administration and HR director a new one about saying one thing and taking the opposite action. Many on the council felt that they had to vote for it so that the SFPD would not be stuck with the old contract and no raises over the next two years, but the FOP’s lawyer, Mr. Wilka called out the HR Director Bill Da’Tool and his lies. He told the council they reached out 4 times to the city for new negotiations since September and they refused. Councilor Pat Starr who voted against the contract with Stehly also called out the HR Director by asking him who directed him to go with this contract, when he tried to downplay the Mayor’s involvement. You got the feeling by the end of the discussion there was a lot of people in the room who weren’t telling the truth.
CITY ATTORNEY STAYS IN ROOM EVEN THOUGH HE IS RECUSED?
Speaking of the FOP debacle, City Attorney Kooistra said that he was recused from the discussion on the Union contract because another city attorney handled it. While that is the right thing to do, the wrong thing to do is to sit in your chair, on the dais watching the whole thing play out instead of in the back room where the councilors go when they recuse themselves. Weird.
E-BIKES, CLASS I, II, III OR TEN, DOES IT REALLY MATTER?
The fun continued when they cautiously approved the Class I E-Bikes for the bike trail. Pat Starr offered to amend the ordinance by allowing Class II E-bikes. The difference? Class I is only electrical assist while Class II have a throttle and need no assist. I found the discussion kind of humorous in a way. I knew a guy in SF ten years ago who built his own E-Bike, and you would have NO idea it was an E-Bike. He basically had a duct taped battery strapped to a normal bike. While he mostly rode it on the streets, there would be NO way of knowing if he rode it on the bike trail. I think this is just some ‘feel good’ ordinance that 99% of SF citizens let alone bike riders know anything about. Let’s see how many tickets are written for people riding Class II E-Bikes on the bike trail next year. I’ll take a guess, ZERO. But hey, let’s drink a couple of beers and throw some axes!
DON’T ALL CONSTRUCTION SITES HAVE LIQUOR LICENSES?
Village on the River got their approval for a liquor license even though it will not be used for 22 months. Councilor Pat Starr asked Lamont’s operations manager if that was going to possible to get the project done in 22 months. He said they plan to be open in 19 months (as long as no load bearing walls don’t collapse).
DID COUNCILOR KILEY VIOLATE VOTING PROCEDURES when it come to RECUSAL?
During the discussion of legislative priorities, 4 councilors had concerns about the presumptive probation that was added by council chair Erickson without a full council discussion ahead of time. Neitzert said it best to the nature that there were pros and cons on both sides and he wasn’t sure if drug addicts should be considered felons. Soehl, Kiley and Erickson were basically taking the word of Police Chief Burns. Soehl (who obviously did NO research said he would just take the word of the Police Chief. Oh my). The Mayor had to break the tie by supporting leaving it in, showing his true partisan Republican colors. You could tell Erickson was not happy the mayor had to break the tie (I even questioned if he should have been voting on THEIR priorities anyway). It really should have FAILED anyway and been stricken, because shortly after Kiley voted to keep it in, he recused himself from voting on Starr’s added amendments, and ultimately the entire resolution. So I guess he got to vote on ‘some of it’? It seemed odd, and is probably a violation of Roberts Rules and Procedure. He recused himself because Starr proposed a priority of supporting foreign languages on driver’s tests. But here’s the stickler, even though Kiley knew about the amendment before the meeting AND was in the red notes, he waited to recuse himself until the smoke cleared on presumptive probation. He should have recused himself at the beginning since he was aware the amendment was going to be presented. His vote on deleting presumptive probation should either be stricken, or the seven councilors should have a re-vote on it at the next meeting. We will see how the city clerk and city attorney handle this one. I’m guessing they will do the right thing . . .
Either way, at the end of the discussion, Erickson ripped everyone a new one because Pat was able to offer amendments. The difference is, Pat proposed his amendments in front of the full council for an up or down vote in public instead of ‘sneaking’ them in before the meeting. Stehly was quick to point this out to Erickson.
PICTURE PAGES, PICTURE PAGES, COME AND GET YOUR PICTURE PAGES
Not caught in the meeting was what was happening off camera. I guess last week a city media staffer was hopping all over the chambers taking photos while the rest of media was confined to their quarters. First off, with the kind of professional camera he was using with a zoom lens, he could have easily just sat in one spot and taken candid photos. Maybe instead of leadership training we need to send him to some photography classes.
His free-spirited performance last week prompted Deputy COS, TJ Nelsover to call a secret meeting with local media news directors to ask them if they would like more freedom moving around the chambers (Bruce and I were NOT invited. Shocker!). The Energizer Bunny continued again this week hopping all over taking photos again, even though there were no awards this week. A councilor asked what he was taking shots of and were told ‘Stock Photography’. While I don’t doubt that was the case (I kind of do), I find it unusual that media services staff has time to take ‘stock photography’ yet we have to pay a private consultant $250 for a 90 second video introduction.
Oh yeah, and, that contract was approved with no discussion.
Another exciting week at Carnegie. Glad I watched from home.
First we have a recent story about the Triage Center with a shot of the Minnehaha County Commission. Shows you how long it’s been since Stormland’s TV cameras have been at a meeting, Pekas and Kelly haven’t been on the MCC in over two years.
I also enjoyed the story about the SF Police getting a raise. Apparently they are now wearing Rapid City badges.
l3wis 