Featured, Politics, Property rights, Steamboat Springs

Tax Increment Financing wrong way to fund downtown Steamboat Springs improvements

There are many infrastructure improvements planned for downtown Steamboat Springs. I agree many of these are warranted and long overdue. Also overdue is a discussion about options on how to pay for them.

Thus far, the only payment option seriously presented is the use of Tax Increment Financing (TIF). I have been correctly quoted that TIFs are a “bag of snakes.” Let’s not fool ourselves — if this bag is opened, someone is going to get bitten.

The TIF currently being discussed involves a redirection of future property taxes that will impact the Steamboat Springs School District and all other taxing entities that depend on these taxes. All the ongoing talk about “hold-harmless agreements” and “state backfill” is just so much baloney. The school district has successfully demonstrated the on-going harm that is occurring as a result of the use of TIF by the existing Mountain District Urban Renewal Authority (URA).

icon_op_edWhat is mind boggling is that those actively promoting the creation of a TIF for downtown are presumptuous enough to act as if they know the complexities of the state’s school finance formula better than the school district does themselves. We are debating the degree of harm we are planning to force on the schools and all other property tax dependent entities. Give me a break – harm is harm!

As URA/TIFs go, the one being proposed is a bit goofy. Typically, when URA/TIFs are formed there is an agreement with a private developer that they will commence with a well-defined project. This agreement is enforceable and failure of the developer to follow through on their commitment has significant consequences.

There is no such agreement being discussed for Steamboat’s downtown URA/TIF. All the good things that some think will occur is based on nothing more than a “hope.”

A select group of property and business owners downtown have tried to pass a business improvement district that would be used to fund some of these projects. This effort has now failed twice.

The downtown business owners don’t believe in this “hope” enough to tax themselves for the promised benefits. Simply put, they want someone else to pay. The URA/TIF in this context is essentially nothing more than a form of legally sanctioned crony capitalism.

One of the underlying reasons this specific URA/TIF is being discussed is that it obligates this City Council and future ones to funding of projects solely within the downtown district. The reason for this is pretty simple – it is a trust issue. The current administrative branch of city government does not trust the elected representative branch to fund the proposed projects over the long term.

A URA/TIF is one way to legally earmark funds so future city councils cannot change their minds for up to 25 years. As a member of this City Council, I am not going to knowingly tie the hands of future city councils.

Why would we do this? It is bad policy to limit the flexibility of councils that may have more pressing community needs than just downtown improvements.

The City Council can establish a downtown URA/TIF without any permission from the voters or other taxing entities. I would argue that just because the city can do this does not mean it should. Let’s not open this “bag of snakes” cleverly disguised as a URA/TIF.

From my perspective the use of URA/TIF to fund downtown projects is a lazy-thinking solution. There are other funding options yet to be explored that would not harm others. Let’s look at those options.

Scott L. Ford is a Steamboat Springs City Council member  from district II



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