In what's turning out to be a multi-part series called "No, Really, What's a TIF," we offer part two, which consists of Sharon Boyd's response to last Wednesday's offering from a Friend of Unfair Park with intimate knowledge of tax increment financing districts. And, of course, that Friend's response stemmed from a very glib piece about how the Victory Park development's the best thing to happen to Dallas since indoor plumbing. Anyway, for those who don't know, Sharon's the creator of DallasArena.com who planted her flag in the virtual ground long ago and still thinks the arena and surrounding development's a bad deal. Yesterday's Dallas Morning News musta driven her nuts, with the entire GuideLive section devoted to the "high-end hotspot." Guess we won't see her Thursday night at the W Hotel's official grand opening. --Robert Wilonsky
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"Yes, property inside a TIF is taxed. As in the Victory development, that land is taxed at the same value (with the old warehouses, power wires, etc.) as it was at the creation of the TIF (Tax A). The improvements to the property (hotel, office buildings) are also taxed, but all of that tax (TAX B) is spent inside the TIF (new streets, landscaping, street lights, private police force, improved water mains).
Here's where it should make you mad!
Two years ago, your home may have been appraised at $150,000, but your neighbor's house sold last year for $200,000. Your house is now taxed at $200,000. Or you added on to your house, put a pool in the backyard and a big new fence. Your house has a higher tax value now, maybe even higher than the $200,000 next door house. You don't get to have your house taxed in two parts, and you don't get to withold part of your tax from the general fund of the taxing authority. You must pay taxes on the entire new value of your home, and it all goes to the taxing authority for their spending discretion.
You may need new lights on your street. Your street may need repaving and new curbs. You may need new sidewalks and improved landscaping. Your neighborhood may need private security because the city can't afford to pay new and current police a salary comparable to Grand Prairie or Highland Park. You can't have any of those things you need until City Hall (the council and city manager) allocates those improvements to your neighborhood, likely sometime in your children's old age, if ever.
On the other hand, Ross Perot Jr. and Tom Hicks get to withold their TAX B from the general budget and spend it on things that will make their property even more valuable to them, while the poor general budget that is inadequate to fund the improvements on your street or the cops to protect your street gets no more tax revenue from their hotel and office buildings than if it were still a "blighted" area (which it never was).
Same thing for all the other TIFs. Council lets them build new structures to attract more people (who will need police protection), that will use more city resources (like water, sewer) and will generate more traffic on our already crowded and pot-holed streets. They don't add to the general tax income because the improvements to their property are TAX B--and all that money gets spent inside their TIF.
You think you are unfairly taxed if you can't spend a hunk of your pro rata share of property taxes to make the area around your property prettier and safer while Messrs. Hicks and Perot can spend their TAX B on a private police force? Think how other business property owners who have to compete with Messrs. Hicks and Perot's hotel and office buildings feel.
Did you see the water main break on Beckley last week? Whoever owns the property around that broken main might like to withold a share of their property taxes to IMPROVE the infrastructure around and under their property."