Tax increment finance, or TIF, districts allow developers to offset some of their projects’ costs by accessing public funding – Oklahoma City’s “Core to Shore” area between downtown and the Oklahoma River and the University North Park shopping center along 24th Ave. NW in Norman come to mind.
But a lot of people take issue with the idea of using public money for private projects, and the 1889 Institute, a right-leaning area think tank, recently said this TIF system benefits established corporations without contributing much to the state’s economy.
“[Director Byron Schlomach] put out a pretty thoughtful paper that suggests that TIFs tend to let business owners carpetbag their way around the state,” said The Journal Record’s editor Ted Streuli. “A TIF, he says, can allow the bypass of taxpayer protection measures, which is one of the problems that's been raised by many people talking about TIFs.”
Read the 1889 Institute’s report “Tax Increment Finance and Suggestions for Reform”
Ponca City economic development officer David Myers told The Journal Record’s Dale DenwaltTIFs can be used poorly, but a lot of it depends on the strategy behind the implementation:
“There is nothing inherently good or bad about a TIF district,” Myers said. He suggested that officials should use an internal but-for test, asking “but for this TIF district, would the business still come?” “In most of the times that we (asked), the but-for came back and said we didn’t need the TIF district,” Myers said.
The 1889 Institute said it would like to see changes in TIF administration and restrictions on how the money is used. For example, some revenue that would normally go to schools could be diverted and used for infrastructure to help the district grow.
“They're OK with that, but they don't want to see it necessarily used for marketing of the businesses in that district, for example,” Streuli said. “They also think that there should be a limit on what taxes can be avoided. And they think there should be a time limit, that the TIF district should have a sunset date when the tax status goes back to normal. They also think that someone at the state level should have some oversight, and be able to approve or decline an application for a TIF.”
But Myers, the Ponca City economic development officer, is skeptical about the state oversight proposition.
“It’s really throwing the baby out with the bathwater,” Myers said about a repeal. “It’s a tool for communities to use to address blight when there’s a willing private partner.” He also criticized Schlomach’s suggestion that top government officials could approve or deny TIFs. Myers said entrepreneurs would get skittish about coming to Oklahoma if the governor or attorney general had to give final approval. “Any time that the public wants to take a look at a tool like TIF, those are legitimate public conversations,” he said. “But what has to be considered are the consequences.”
Food Truck Protection
Earlier this week Farmers Insurance announced it’s offering food truck insurance in Oklahoma and 15 other states. The policies are essentially a hybrid that covers both the vehicle and the mobile restaurant operation.
“There aren't a lot of specifics out there yet. It's a brand-new thing for Farmers, and they're kind of the first ones doing it,” Streuli said. “But we do know that one market research company, IBIS, they're data shows that the food truck industry is really doing about $857 million in annual revenue right now, with an average annual growth rate of 9 percent.”
That’s significantly better than the food service industry as a whole. Cody Hail, who runs downtown Oklahoma City’s Urban Taco food truck for the past year-and-a-half, says he already plans to switch from Travelers Insurance to Farmers, The Journal Record’s Brian Brus reports:
He said his insurance agent told him about it about a week ago and Hail is eager to consolidate his business policy and new homeowner policy for savings under one company. “It’s going to simplify things a lot, I hope,” Hail said. “It was a little harder to find good rates for commercial and residential.”
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