A Tax Incremental Financing Review

Today at four o’clock, the Joint Review Board is scheduled to review Whitewater’s tax incremental districts. Views of tax incremental financing – especially in a place like Whitewater – are a good test of someone’s basic understanding of economic development.

Indeed, the test reduces to a simple relationship: the more one contends that tax incremental financing has been good for Whitewater, the less one understands about economics or community development.  See ‘Crony Capitalism and Social Engineering: The Case Against Tax-Increment Financing.’

After a generation of community influencers insisting that tax incremental financing was a great tool for Whitewater, Community Development Chair Larry Kachel admitted at last what anyone in Whitewater would know:

“This new EOZ program allows for private investments to be made, with significant tax benefits, in lower income communities like ours that need a boost to their economy,” said Larry Kachel, Chair of the Whitewater Community Development Authority (CDA).

(Emphasis added.)  See A Candid Admission from the Whitewater CDA.

Notice how revealing Kachel’s remarks are: he touts tax benefits to investors (who are often outside the city), but is silent on income benefits to residents who actually live here.

Whitewater’s problem – and the failure of so many ‘community developers’ – could not be more clear:

That a few have done well for themselves – and made sure everyone else knows as much – is undoubted; community development is not a matter for a few.

Hundreds of millions in public expenditures, over the last generation, for bridges, buildings, an Innovation Center, WEDC this, WEDC that, roundabouts, sketchy tech ventures, huge infrastructure projects, etc. – and for it all, still a lower-income community.

If one cannot show meaningful wage growth for individuals and families, after a generation of project spending, how has there been meaningful ‘community development’ for Whitewater?

Immediately below, see the fifty-seven pages signifying generational failure that will be before the Joint Review Board later today.  Thereafter, see a sound analysis of tax incremental financing, in the place of one-too-many unsound local press releases.

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