Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Wednesday, September 16, 2015

A new requirement for local governments to disclose tax abatements a step forward, but weak and minimal

In the middle of August, the Government Accounting Standards Board released a new accounting requirement for local governments that effective in 2017, requires local governments to disclose tax abatements as part of the Comprehensive Annual Financial Report that local governments are required to produce and file each year. See "GASB Requires Disclosure of Tax Abatements" from Accounting Today:
The new disclosures about tax abatements that are entered into by other governments and reduce the reporting government’s tax revenues include the name of the government entering into the abatement agreement, the tax being abated and the dollar amount of the reporting government’s taxes abated.
According to Good Jobs First, the requirements are very general, do not include all such examples of subsidy, don't require disclosure by action and party, so there is no "naming of names," and fail to require reporting of the abatements and their impact on an ongoing basis, only a summary statement each year of that year's abatement awards.

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At 11:47 AM, Anonymous Anonymous said...

tax increment financing deals are the modern day equivalent of corruption-or favoritism- pure and simple

At 2:10 PM, Blogger Richard Layman said...

I don't agree. Some projects make a lot of sense. Others don't. Better disclosure requirements and more robust approval processes (as discussed in the previous entry) would make a difference.

it wouldn't be perfect but it would be better.

Plus the way Tif works in most places cuts the funding to schools in significant ways, which isn't good.

There are definitely problems, but it is a necessary form of financing. Local governments often don't have a lot of options otherwise.

At 8:19 AM, Anonymous Anonymous said...

well you seem to agree that there are big time problems- and the way I see it- these deals have the appearance of corruption or sweetheart deals for the select few- so this to me is tantamount to corruption

At 9:57 AM, Blogger Richard Layman said...

Look at any of the Urban Renewal Districts in Portland, OR to see how TIF can be quite valuable. It came up with some of the money to construct the Yellow Line light rail, other places use TIF to fund development associated with transit, etc.

To call any use of TIF tantamount to corruption is an overstatement of vast proportions.

But yes, it always isn't necessary (e.g., the now junked Howard Town Center was awarded TIF even though the CFO said it wasn't required to make the project work) and because there isn't an open process, it becomes a point of contention and competition between developers, e.g., the projects and 1st and M NE (now with Harris Teeter) and 3rd and H NE (now with Giant) competed for TIF and grocery tenants. 1st and M got money first and opened a few years earlier than the H St. project.

At 10:55 AM, Anonymous Anonymous said...

not saying that it can't be used in a positive manner just that in WDC it seems to have a checkered history to say the least-why for instance- does ben's Chili Bowl get a tax rebate while other heritage eateries go unsupported? Ben's even has had enough of a backing to expand their enterprise and has now turned into a chain..

At 2:26 PM, Blogger Richard Layman said...

I don't think Ben's ever got one, they wanted one, sure. But a "long time commercial property owner" tax rebate program was never developed.

They might have rec'd financial benefits in opening up the store on H Street, from the same program that has assisted dozens of businesses on H St. and elsewhere in the city.


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