2/24/07, by Vito Mastrangelo

I recently attended a public hearing for the City of Mt. Vernon’s proposed TIF district at the site of the old Homestead golf course.

What exactly is the benefit to the taxpayers of Jefferson County? It seems that the benefits go to (a) the developer, (b) the City of Mt. Vernon, and (c) perhaps the would-be affluent senior residents of the development.

The developers get a sweetheart deal for the construction of housing supposedly for seniors. The City gets a deal because it will use the increased tax base for infrastructure improvements.

But the increased property taxes that would otherwise inure to the benefit of Jefferson County taxpayers from the increased property value would not be available until at least 10 years after the project starts.

A win/win/wait 10 years deal

The City of Mt. Vernon is proceeding with the establishment of a tax-increment-financing district. The land which will form the basis for the TIF district was recently annexed by the City. The land is currently occupied by a golf course. The City is using the TIF to give monetary breaks to a developer to create housing for affluent senior citizens.

The presentation was slick. Several homeowners from the neighborhood in which the TIF will be located spoke out with various concerns. But the big picture was never mentioned: Why is the city giving tax money to a private developer and taking some for itself but making the other local taxing bodies wait for their increased revenue?

There are several viewpoints from which the situation could be considered. There’s the developer, which is a private company. A good deal for it. What otherwise would be an iffy development from a profit standpoint becomes a great profit-making enterprise. This developer will have some of the development costs paid for out of funds that should have been going to the local taxing bodies, that is, excavating, grading, ....

This developer will get breaks from the City that the normal citizen does not.

In other words, the increased property tax revenue will be diverted from the schools and the other taxing bodies to a private company (the developer) and the City. Instead of the schools and the other local taxing bodies having to wait 10 years for any benefit, perhaps the developer and the City should have to share the increased tax revenue with the taxing bodies. Why should a private developer get its benefit up front?

It seems that this is another saga in the continuing story of governments assisting in the funneling of public monies to private corporations.  It's called corporate welfare.

Vito Mastrangelo