When we hand out tax dollars to developers, we need more information, not less.
Sen. Rick Girdler, R-Somerset, recently introduced a bill that might seem small and inoffensive, but is in fact a really bad bill that highlights some disturbing trends we see out of Frankfort.
Senate Bill 111 would reverse an improvement to the TIF statute enacted last year. TIFs, as you may recall, are a way to help private corporations build projects by returning some of the tax revenue they produce, usually property or occupational taxes. Last year, the General Assembly decided to add some accountability by requiring local governments to do the same independent assessment of a proposed project that state TIF projects usually get. But Girdler’s bill takes out the “shall” and adds a “may,” so that local governments can choose whether they get the analysis or not.
As I’ve made clear numerous times, I think TIFs are corporate welfare that have given away millions of local and state tax dollars without any studies or proof that they improve communities. Girdler was not available for comment as to why he thinks this is a good idea.
Most independent consultants do of course decide the proposed project is a winner because that’s what they’re paid to do by the project’s developer. Nonetheless, the consultants at least assess the costs, projections and potential in a manner that is more detailed than someone saying, “I promise it will work.” Without those reports, the public would know even less about developments that reshape communities and give away tax dollars.
It’s interesting that Girdler is the bill’s sponsor because Somerset is suddenly a TIF hotspot, including one for a private “University of Somerset” whose board is headed by Mayor Alan Keck (who is strongly considering running for governor in 2023) and his brother. Another TIF project includes the Horse Soldiers Bourbon company. As part of that deal, which included $30 million in state incentives, the city of Somerset will allow the company to keep 80 percent of new occupational tax revenue generated by the project.
So you can see why TIFs require much, much more information, not less. What would be even better information would be a substantial study of past TIFs to see exactly what they have done to improve local economies in the past. Right now, the state does not even track local-only TIFs so there’s no way to even know how many there are.
One of those local TIFs, you might recall, was one for a gas station complex that evicted more than 50 trailer park residents in Morehead. As I wrote then, “TIFs were invented to aid redevelopment of blighted, abandoned urban and industrial areas, but they have been bastardized out of all recognition now, the definition changing whenever a wealthy developer can hire lobbyists that rewrite the law, as happened with Lexington’s Summit development.”
On Wednesday evening, I heard from Bryanna Carroll at the Kentucky League of Cities who said that KLC and the Cabinet for Economic Development fully support the bill, which they see as a fix to a mistake. The mistake, made in the final days of last year’s session, was requiring local-only TIF projects to get an independent assessment because it flies in the face of local control. That’s the back story of the bill; unless, like me, you think that mistake was the right thing to do.
Sadly, TIFs have become so normalized that hardly a project can be proposed without a TIF alongside. That’s capitalism for those displaced, like in Morehead and Somerset, and socialism for the developers. In addition, we keep seeing bills out of Frankfort that lessen transparency, such as proposed changes to information available on local officials. Mistake correction or not, Girdler’s bill would only exacerbate that trend.
This story was originally published January 26, 2022 at 1:29 PM.
