Tax Increment Zones, Tax Increment Reinvestment Zones, Transportation Infrastruction Zones are all essentially the same. They are property zones created by local government to dedicate growth in tax revenue after a certain date to a specific economic development activity. The political leaders tell their citizens about all the wonderful characteristics of such a zone, but, they never mention the negative characteristics of such zone. We will try to identify all the relevant characteristics of these government created entities.
The politicians tell us, the taxpaying citizens, the following:
1. A TIZ stimulates economic development.
2. A TIZ is a partnership between the government and developers.
3. There is a separate Board to manage the TIZ.
4. The TIZ has an expiration date.
5. TIZ revenue does not come from existing tax base and thus does not cause the tax RATE to increase.
6. TIZ revenue is restricted to how and on what it is spent.
7. TIZ revenue can be capped, with excess going to general funds.
What the politicians do not tell us is the following:
1. Tax Increment Reinvestment Zones are an admission of failure. Every time Government creates a TIZ, it is a vote of no confidence in its own ability to properly collect and spend taxpayer dollars.
2. It is a confession that our city should be managed by unelected boards at secretive meetings who can issue debt without voter approval.
3. History has shown that TIZ funds are spent on activities and projects not specifically approved in the governing documents.
4. A TIZ provides our elected officials the opportunity to engage in crony capitalism by providing tax subsidies to favored developers.
5. A TIZ is a mechanism for the city to take a larger share of limited tax revenues from rival entities like school districts and the county.
6. A TIZ provides urban planners the opportunity to practice social engineering by promoting high-density, mixed-use developments that are anathema to most citizens. This is exactly what would happen along a Lone Star Rail line if a TIZ is created as requested.
7. A TIZ rarely, if ever, expires. They are routinely renewed, expanded and extended.
8. Each TIRZ represents a moment when our elected officials decided to hand over the purse strings to someone else, diverting dollars that could have been spent shoring up pension obligations, paying down debt, or enhancing public safety.
9. Economic development may be slowed if new businesses are not provided the same incentives as those provided in an existing TIZ.
A description of the three existing Tax Increment Reinvestment Zones in Georgetown may be found here. The existing TIRZs are Rivery Park, Downtown and Williams Drive. The governing Boards and members are identified in the afore-mentioned link.
When considering all the attributes of a TIZ, it seems extreme caution should be exercised before creating such an entity. Very strict controls and time limits should be imposed. It is believed that the city should have a bias against using such constructs and only use them in very limited cases.
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