Great minds and all that. See John Dunn’s, Susan Reider’s, and my LTE’s on the Tax Increment Financing (TIF) currently being debated.
NONE were pre-coordinated, to my knowledge.
One gentleman who is a Milt called me from Harrisburg to thank me and offer to help my campaign that very day it ran.
All available at http://news.thesunontheweb.com, which is a paid site; and by hardcopy.
January 22, 2015
The Township is heavily promoting the merits of TIF, Tax Increment Financing. It is a tool used for public financing to subsidize redevelopment, infrastructure, and other community-improvement for “blighted areas”. It appears this is how the downtown corridor is definitively being spun as a blighted area to qualify for a TIF which is far from what one would define as a blighted area.
On the surface, TIF sounds great and works nicely for the Township, but it has conditions that negatively impacts the School District’s ability on a yearly basis to generate incremental revenue from real estate taxes from appreciated properties from development. When TIF is enacted, it freezes the current real estate value of that property for a period of some 20 years and the advantages of that goes back to the operational handling of the TIF. This is very reminiscent to the Amusement Tax where Hershey Interests contracted the Township into freezing that rate for a 50 year timeframe directly at the expense of the private property owner. They have an agenda and it is not you.
To give an example, the 19 East Chocolate property, which was the plant, has a current assessed value of $5.9 million. Under TIF, that value would be frozen for some twenty years regardless of the development that would ensue adding appreciated value to our community. If developed to the potential value that parcel demands, it would easily be a $50 million assessed real estate value that would add incremental tax dollars to the School District. Unfortunately, the consequence to the School District would be that the development of that property would be frozen at $5.9 million over the following 20 years while its real value would be $50 million. Not garnering the true value of that development over the 20 year period would cost the School District over some $14 million in lost tax revenue.
Is this good for our community that our School District is denied that revenue stream so that business subsidizes the Hershey Interests to comprehensively develop their personal plan at the expense of the private homeowner? Without this potential incremental monies coming into the School District, who picks up the bill? Yup, it’s us, homeowners, who are the only avenue the school has to tax to meet their obligations. Another classic case of one of the richest Trusts in the United States putting it to the private citizens of Derry Township.
Don’t accept this shell game. Google “what are the shortcomings of TIF” and one will quickly see multiple examples how this funding scheme has gone array. Interestingly, the state of California who invented TIF has axed it. A concept too good to be true; you bet and which it is. Don’t allow this to be a funding tool for Derry Township.
John BN Dunn
January 29, 2015
If Derry Twp’s Tax Increment Finance (TIF) district is authorized, it will help fight “blight” in Hershey.
Huh? Developers who can afford to develop in Hershey – wherever these “blighted” areas downtown may be – rarely show signs of struggling to make ends meet. My taxpaying family is currently. If there is a 2015 General Fund budget balance of over $2M, as predicted, return that cash to we who struggle to pay it.
Several years ago, our terribly regressive OPT (Occupational Privilege Tax) was increased by 25%, in one fell swoop. The deficit was caused by frivolous expenditures, of little benefit to those most hurt by OPT’s increase. Decrease that first, as I wrote in these pages on Jan. 19, 2012.
We The People of Derry need fiscally responsible leadership. First and foremost, this requires saying no to those who don’t need help, in favor of those who do.
Before subsidizing lucrative ventures largely undertaken by comfortable people, how about a little relief to the working stiffs?
April 16, 2015
I read the Downtown Hershey Association’s plan with enthusiasm, until I got to the action item regarding Tax Increment Financing. The Association considers this a necessary condition for downtown revitalization, and I think any alert taxpayer in Derry Township should ask why.
Tax incentive financing is a tool used to attract developers to blighted neighborhoods. According to my research, the financing scheme basically works like this: a committee of representatives from all local taxing authorities gets together and determines what the taxable value of a particular property or area (TIF district) might be after development. The difference between the pre-development tax revenue and the post-development anticipated revenue – the “increment” – is used to borrow money on the municipal bond market to cover the cost of public infrastructure associated with the development, such as sidewalks, parking, lighting, etc. This money is given up front to the developers. The bond is repaid by the taxing authorities, by sacrificing some portion of the increased revenue from the TIF district.
Here are some of my questions. First, given the tourist traffic and relative wealth of our township, why the sweetener for developers? It seems to me that this creates private wealth at public expense – very bad public policy!
Second, why the rush to create a TIF district in downtown Hershey when action on our comprehensive plan seems to have stalled? Wouldn’t it be better to determine what is best for the entire township, before raising funds to support private development in downtown alone?
Third, our Board of Supervisors has no conflict of interest policy and two supervisors are developers. Are they prepared to recuse themselves from voting on this matter to prevent the appearance, if not the fact, of a conflict of interest?
Finally, why are the taxpayers of Derry Township paying developers to correct a situation largely created by the Hershey interests when they decimated West Chocolate Avenue in the first place? Yes, more people are participating in public meetings about these issues, but what difference will it make in the end? In this company town, it seems to me that the more things change, the more they stay the same.