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Op-ed

Howard County TIF sacrifices taxpayer dollars

A plan to fund a 64-acre development in North Laurel with tax increment financing amounts to a sacrifice of Howard County taxpayer dollars to non-local, private interests and would discourage at least as much economic development as it is supposed to promote.

The Stronach Group, which owns the nearby Laurel Park racetrack and other horse racing facilities in Maryland, has planned the project to include 127,000 square feet of retail space, 650,000 square feet of office space and 1,000 residential units.

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The proposal the Howard County Council is considering would have the county borrow against projected future increases in property tax revenue — resulting from the rise in property values and assessments that the planned mixed-use development is supposed to create — to pay for infrastructure the project would require, including roads, sidewalks and storm drains.

The Howard County Council on July 26 voted 3-2 to create the special tax district required for implementation of the financing scheme, but has not yet authorized the financing itself.

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The Stronach Group website describes the firm as "one of the world's leading horse track operators and suppliers of pari-mutuel wagering technology." Why, then, should county taxpayers be picking up part of the tab for one of its investments?

Proponents would have us believe that tax increment financing (TIF, for short) stimulates the local economy around the special tax districts created to implement it. Under Armour founder Kevin Plank convinced the city of Baltimore to authorize $660 million in TIF in support for his Port Covington project, and local governments across the country have turned to this device in the name of job creation and urban renewal.

Despite its popularity with politicians and business executives, however, evidence suggests that TIF does little to provide either of these. A 2013 study from the University of North Carolina's Department of City and Regional Planning looked at TIF projects in Chicago, which employs them more than any other large American city, and 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."

A 2008 report from the UNC School of Government notes:

"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."

This April, four local developers filed a lawsuit contending that Howard County's recently approved TIF arrangement with the Howard Hughes Corp. — to fund construction of a parking garage as part of the redevelopment of Columbia's Town Center — constitutes an "improper give-away of county tax dollars" that hurts them and local taxpayers. It's not hard to imagine the county government being compelled to wage a similar legal battle in the event that the North Laurel TIF is approved, further straining local resources.

Stronach, the corporation that county officials are considering funding with this proposal, is not based in Howard County, nor even the United States, but in Aurora, Ontario. Sending profits out of Howard makes the county poorer.

As initially conceived and executed in the 1950s, TIF was aimed at helping distressed neighborhoods to recover. Unfortunately, the mechanism has morphed into a welfare program for billionaires.

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It's time for Howard County and other local governments to stop buying the pig in a poke that is tax increment financing. Tell the billionaires and multinational corporations that public funds are for public purposes, not to subsidize their profit.

Doug Miller (beacon7712@comcast.net) is a member of the Howard County Green Party and a former columnist for the Howard County Times/Columbia Flier.


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