The state senate decides to let communities keep giving away parts of their tax bases so they can lure businesses away from other communities with tax increment financing deals.
Tax increment financing lets new or expanding businesses keep part of their property taxes, using the money for their development. Sometimes, say critics, those deals made by communities undermine the school district tax income and sometimes they’re used to build something new in one town that hurts a competing business in a nearby town.
Senator Tim Green had proposed requiring every county to establish 12-member TIF Commissions with representatives of the county, communities, school districts, and other taxing districts making decisions on giving those tax breaks.
One supporter of the plan told the Senate that business lobbyists were fighting to maintain the status quo. But he says the status quo hurts the economy by encouraging building more commercial real estate than the consumer can support.
Green says his plan would not have ended TIFS but it would have required more cooperation in business development in an area. Nonetheless, Green’s proposal was supported by only 12 of the 34 members of the Senate.