Wrong About TIF, Which Is Still Wrong

Wednesday, July 06, 2016

Because I am an Arsenal fan, and American businessman Stan Kroenke is the team's majority shareholder, stories about the real estate and sports tycoon stand out to me. Unfortunately, something from within such a story stuck out like a sore thumb: The similarity of a Republican politician to the sleaziest stereotype of a pandering Democrat I can imagine. This politician stands out, but I am sure he is typical of many local Republican politicians in this day and age.

Kroenke, who recently upset many in St. Louis by moving his NFL team to Los Angeles, has become interested in spearheading a large real estate development in Maryland Heights, a suburb of the Rams' former home. Naturally, since we don't actually live in a capitalist economy, every Tom, Dick, and Harry in the local government feels entitled to have a say in how someone else disposes of what is nominally his property.

Joe Brazil, a Republican councilman from the county across the Missouri River from the development, is a prime example. Unfortunately, he is not being quoted as a lone champion of property rights, but as part of the chorus of public officials who would run everything.

Joe Brazil, a Republican councilman in St. Charles County, across the river from Maryland Heights, said development in the flood plain is bad enough. If Kroenke is involved, he said, that would make it worse.

"Here you've got a guy who pretty much kicked us in the crotch once and now we're letting him do it again," Brazil said "I don't think anybody should be developing on that 1,800 acres. Nobody should. It's just bad planning."
Now, given that we are a far cry from even starting to ratchet back the entitlement-regulatory state, I can understand why a decent politician might be put in the awkward position of having to look out for constituents outside the proper scope of government. Be they downstream of a large development on a flood plain or made to foot the bill for any problems such a development could cause, it is local officials who are in charge of the problem as things stand today. That said, Brazil sounds more like he's throwing everything at a wall and seeing what will stick.

On top of that, who owns the Rams? And by what right did area governments levy taxes to pay for a stadium the owner ought to have built? If Kroenke "kicked" anyone's backside, it was with the help of local politicians with the consent of most of their constituents, not that that makes it right. Not only should Kroenke pay for his own stadiums, he should also bear any losses caused by flooding this development suffers, as well as any problems it might cause other property owners.

But, just in case you might still have a generous interpretation of Brazil's opposition to this project, we have the following:
Tax incentives such as tax increment financing are common, almost standard, for large-scale development projects in the St. Louis area. Maryland Heights has used TIF for other projects, too, though opponents say it is simply a tax break for the wealthy. Brazil called TIF funding "white-collar welfare."
Nice class warfare rhetoric, but poor opposition to the taxes that make such "incentives" a factor in investment decisions at all. First of all, letting someone keep more of his own money isn't "welfare" and second, welfare (like other government entitlements) has to come from someone's pockets, and someone has to do the looting. When I hear a politician objecting to that on principle, and no matter how shallow or deep their pockets, I'll entertain the idea that he is qualified for his job.

TIF reminds me of the "tax holidays" some Republicans are so fond of: If lower taxes are good for a day or for a group of people, they are good for everyone. But I'd go a lot further than that.

-- CAV

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