You might ask yourself why the Missoula Redevelopment Agency recently gave Starbucks, a thriving national company, $66,000 to locate within feet of four thriving local coffee outlets? And why did it provide nearly half a million for sidewalks at South Crossing, a destination for national companies? Incentives to big corporations to settle in Missoula only make us more generic and reward businesses which have already decided to invest. Local business owners cannot compete with the power of large corporations aided by the power of local government.
Finally, why did MRA give $322,000 for pavement and $22,000 for curbs/sidewalks to the new Poverello, a non-profit, knowing there would be no tax return? Why is the only major recipient of urban renewal funds on East Broadway, the University of Montana, also a non-profit? Why is the West Broadway district made up of mostly non-profits as well? The purpose of increasing development is to increase the tax base, yet non-profits are tax-exempt. This provides funding directly out of your pocket, never to be repaid?
Missoulians should ask if a smoke-and-mirrors tax scam is being perpetrated by local government. The Missoula Redevelopment Agency seems to be using a rather old game already discredited in California to suction taxes from already stressed taxpayers. The first step is to tag portions of Missoula County as blighted or “under-utilized" areas. Apparently nearly all of Missoula fits the bill. MRA districts include:
• The center of town from North Broadway across the river south to Third Street and from Garfield Street to Caras Park.
• Every viable business on the Highway 93 strip between Reserve and Mount, except for Southgate Mall.
• East Broadway from Madison Street east (proposed).
• The Broadway Triangle, containing the Poverello Center.
• The other Broadway Triangle west to the railroad trestle bridge and from Broadway south to the river.
• Main Street to the River, Caras Park, and Higgins to Madison (proposed).
• North Reserve to Scott Street east and west and from Interstate 90 to West Broadway north and south.
These neighborhoods contain thriving businesses whose owners are proud of their establishments. Many are bustling centers of Missoula commerce. Yet it seems local government is using a convenient opportunity to pick losers and winners through tax increment financing.
And what is tax increment financing? Local government freezes tax revenue from an area for a specified number of years (usually 15-20), and in return the renewal district reinvests anything over the cap back into the district in the form of infrastructure and development projects.
Unfortunately, this shifts taxes from one area to another and from one taxpayer to another. The shortfall created by tax-increment financing is borne by other entities in Missoula. That means you, the taxpayer, and owners of viable businesses are paying yet again for local government to engineer your lives.
In addition, tax increment districts impact county school taxes, causing tax shortfalls which other parts of the county have to make up. Since schools need specific amounts of money to fund their budgets, they must levy more millage to repair for what is lost in these favored districts. This harms schools and educational quality.
Though urban blight districts are sold as a way to improve urban areas, they can lead to problems such as gentrification of neighborhoods, which pushes the lower-income owner out; money manipulation in areas where improvement would have occurred without the designation; and overuse of eminent domain affecting property rights security. And, of course, if local government is in this up to their ears, it can result in corruption, which allows bureaucrats to pick winners and losers.
Tax engineering is going on under the cloak of night in Missoula and most of us are unaware of how extensively the city-county complex is using tax increment financing/blight to determine how our lives are to be led.
Missoula business owners and taxpayers need to delve deeper into this situation to understand why what appears to be tax shifting and outright tax giveaway are becoming so costly for all of us. Perhaps we need to outlaw tax increment financing, as California has? Or will we, like California, be paying for these old tax shuffles for years to come?
Please Wait…
Almost all on the backs of middle class property owners.
When the MRA evaluates an application for redevelopment assistance, it reviews thirteen or so elements including new tax generation by the redeveloped project, job creation, public benefit, etc. It is more than simply a process to leave a stack of money on the porch somewhere. These reports, created by the MRA staff, are public documents and can be examined by anyone who wants to get beneath the headlines as to how MRA uses its funds. From the shallow explanation in her opinion piece, it is not clear whether Vicky Gordon took the time to examine those reports.
Is there room to disagree with MRA and how it does things? Of course. Like other public bodies, their meetings are open to the public as are their documents including applications for funding, staff reports, budgets, expenditures, etc. I believe there is a lot of room to discuss MRA and what it does and how it does it. It is helpful, though, if the discussion is informed rather than incendiary.
So, on one hand, while a corrupt, obese, bullying mayor is fighting to steal a water company because he 'says' he doesn't like that a few million dollars are going to outside investors (even him if he looked at his retirement account more closely), on the other hand he then willingly gives away taxes to out of state developers and conglomerates under the auspices of curing blight. Something that Missoula could well do on its own if the same advantages were afforded small locally owned entrepreneurial businesses which would keep the money local.
They and their policies have helped me not at all. They've hurt me.
Watching Engen try to construct his business empire by mismanaging, at the start, the entire cost of his acquisition effort (which is fast approaching three times the original estimated cost), and claiming that his mismanagement shows that Missoula can more efficiently manage a water system is in a class of stupidity all by itself. And a city council that buys into it needs to be replaced.