Wednesday, July 08, 2009

No Freebies for Government Employees

Racine Aldermen Aron Wisneski and Terry McCarthy have proposed a program wherein local government employees would be given land and lower taxes if they built a home on the property and lived their for five years. Read about it here.

Sorry aldermen but this is just plain wrong. If you are going to offer opportunities for free land and lower taxes, offer it to everyone. Otherwise it would appear to all that you are just rewarding your own.

On a positive note, at least you are implicitly acknowledging the problem of high taxes in Racine. And Wisneski is getting somewhere by showing interest in "studying the possibility of creating small TIF districts where homebuyers could receive benefits for moving into the city if they make improvements to the home."

This is something I have advocated numerous times on this blog. Instead of punishing people who improve their properties, in the form of a big tax increase, they should give them a tax break for several years on the improvements. Offer the program to everyone to ensure fairness.


Anonymous said...

Yes, and just like Time Warner promotions, only the new people would benefit from the TIFs. The shmucks who already live here and pay for all the games and foolishness can just shut up and open their wallets again. If you bitch, you are an evil hater!

Denis Navratil said...

Well anon, that is not how I would design the TIF. It would be available for anyone improving their property. I have already improved mine substantially so I would be SOL. Even so, I think it would be good for Racine in that it would "incentivize" people to improve their properties via lower taxes. Nothing wrong with that IMHO as perhaps some city officials are finally starting to realize that high taxes are one of the reasons for the lack of development in and depopulation of Racine.

Anonymous said...

I was stunned when I read the article in the JT. What makes these politicians think the public employees deserve more perks than others? From what set of assumptions or values do these ideas spring?

Denis Navratil said...

anon, thanks for your comments. I, on the other hand, am not in the least bit stunned by nonsense proposals from local politicians. I wish I were.

Anonymous said...

After the houses are built, they will be declared an historic district. The owners will be unable to leave. In this way, Racine will eventually rebuild itself.

George said...

Beyond the fact that the program doesn't go far enough (i.e include everyone) do you think it's a good idea? I mean, if this small program succeeds isn't there a better chance that a larger program could be created in the future?

Caledonia Unplugged said...

Denis - I agree with your premise of equal incentives completely, but am going to play devil's advocate here.

You're throwing that TIF word around very loosely - makes me nervous. There are very specific requirements set down by the state to create a TIF district, some of which I don't believe would/could be met, or approved by a state mandated review board for people simply improving their property.

And even if you declare everything you want to TIF blighted, at what point and to whom do you say no TIF? You can't TIF the whole city - you'll severely strap, in very short order, the other taxing entities that receive no benefit, for years or decades, from increased taxbase, which would only result in them increasing their property taxes on everyone not in a TIF. Want to start a revolution, that'd be a great way to do it ;^)

TIF districts have become so perverted from their original intent of a specific period of lower taxes for a company, balanced with the additional revenue from income tax and consumer spending that comes with additional jobs.

I'm not at all a fan of TIF for residential projects, particularly when relying on private homeowners to provide the increment.

Sorry Denis, rant over, just killing time til Mr. CU gets home and we hit the nearest fish fry ;^)

Urban Pioneer said...

CU, I propose a City, County, and Statewide TIF..For Businesses and residential. Lets cut Taxes across the board 10%, and freeze all Spending at say 2005 levels.. Replace some workers with Jailed inmates. Downsize the responsibilities of all levels of Govt.

I know it's a pipe dream...but A dude can dream can't he?????

And if the economy keeps sliding we might be forced to doing just that anyway!!!!

Caledonia Unplugged said...

UP - not sure if you've been dreaming or smoking - if the latter, can I have some?

Of course what you suggest would require a massive change in state law. Can't remember the exact percentage, but any municipality cannot TIF more than like 15% (don't quote me on that number - maybe you know for sure?) of their equalized value. And you can't just TIF for exclusively residential unless you can show blight remediation - of course with the city of Racine that might be possible ;^)

But, if you could get taxes cut by 10% and rollback prices to 2005, guess what - you wouldn't need to TIF anything - people and business would be tripping over themselves trying to get here. In fact, completely eliminate TIF creation statewide and you could cut taxes even further by reducing a municpal and state costs via eliminating the TIF bureaucratic support system/extensive consultant fees.

I like my pipedream better! lol

Patrick said...

There is no way Dickert lets this go forward.

Denis Navratil said...

Calunp, sorry for the delayed response. I may well be misusing the term TIF. What I am suggesting is that new development, which isn't happening at present, be spared the increased property tax for a bit. There would be no upfront cost to the city and little if any to taxpayers. It would simply be an incentive to individuals to invest. My understanding though is that this would require a law change at the state level for some reason.

Caledonia Unplugged said...

Denis - you're correct about the state law on this. Some crazy statute states property taxes must be levied equally, or something along those lines.

It would be nice if individual municipalities had a little more leeway to incentivize for certain development/improvements outside of the TIF process, without being as blatantly discriminatory as this land giveaway proposal.

There was something interesting going on across the pond in (I think) Benton Harbor Michigan a couple years ago - don't know if it still applies. But any business that would come to their run-down industrial areas would get the building for free, as long as they made significant improvements, and would pay no property taxes AT ALL for a period of about 5-10 years, maybe more, I don't remember the exact specifics.

I don't think this was accomplished as direct TIDs since there'd be no increment repayment, but obviously state legislators, or representatives from Benton Harbor, were able to craft some sort of legislation to get this deal to work. This is where you need Turner, Mason, whomever, to become proponents for these types of incentives and work to change things at the state level.

Downtown Brown said...

Imagine if we could cut our taxing and spending back to 2005 Levels and freeze them for 3-5 years at hose levels, use attrition at all level's of Govt. Use temp. workers wherever possible, to reduce the future costs to the tax-payers.

If we did this...we'd have to build a fence to keep the companies and businesses, and individuals from coming to Wisconsin!!