Rogers Mayor Steve Womack and developer Charles Reaves are discussing a reduction in the size of a tax increment finance district along Interstate 540, the Northwest edition of the Democrat-Gazette reported last Sunday.
The TIF district is currently five miles along the hottest stretch of commercial real estate in Arkansas, if not the United States. The mayor is talking about restricting the district to the Pleasant Grove overpass and some adjacent land. At least for now, with other, smaller TIF districts to come.
Why? Give the mayor credit for candor, if not integrity.
“There is no question that a project-specific TIF is smaller and draws less attention,” Womack told the D-G. “There will be less flies swarming around. Anyone who would challenge us could not say the area has enough infrastructure. We think we meet the ‘blight’ test.”
I don’t have space sufficient for explanation and outrage. But here goes. A TIF district, as enabled by a 2005 law, allows cities to take school property taxes and give them to private businesses for infrastructure or even private projects. It’s a developer/bond daddy dream come true. Please note that the mayor is talking to the developer, not voters, about changes in Rogers’ existing TIF district.
The developer wants a $7.6 million overpass to improve access to his 1.2-million-square-foot Pleasant Crossing retail center. “The ingress and egress into any commercial establishment is very important because it is part of the shopping experience for the customer,” developer Reaves told the D-G.
Indeed. So why can’t the blankety-blank shopping center developer pay? Because that’s not the Arkansas way. Only chumps and working stiffs pay taxes. The rich guys get to keep their tax money for improvements to their property.
Sen. Tim Wooldridge, who shepherded TIF legislation through the Senate, says developer Reaves is exactly right. If undeveloped land needs infrastructure, that meets the statutory definition of blight and thus qualifies for tax advantages, Wooldridge told the D-G. So there it is. Any piece of vacant land in Arkansas, no matter how expensive, qualifies for taxpayer subsidy if it could use some infrastructure.
Womack seems to be feeling a little nervous about the ill appearance of transferring money from school kids to Charles Reaves’ pockets. But he’s mistaken if he thinks carving the big TIF into a series of smaller TIF projects is somehow more legal. Size doesn’t address the core issue. Is it constitutional to take money approved by voters for schools to help a shopping center developer? Also, did the TIF constitutional amendment repeal the constitutional amendment requiring a 25-mill local property tax for schools?
Hats off to state Rep. Rick Saunders of Hot Springs, who tried without success to restrict TIF use to truly blighted areas. The Rogers land in the TIF district is already developing. It needs no corporate welfare to develop, he noted. “Undeveloped land is not blighted and I’ll argue with them until I meet my maker,” Saunders told the D-G.
Womack’s noise about scaling back the TIF grab is a small hopeful sign. He needs to hear from more people like Saunders. Meanwhile, he could answer me this: If Reaves’ huge shopping center needs an overpass, why not form an improvement district or ask taxpayers to approve a bond issue backed by property or sales taxes to pay for it? Why rob the schools?