Giving Away the Store to Get a Store

Tax increment financing is no bargain for taxpayers.

Daniel McGraw from the January 2006 issue

(Page 3 of 3)

But the argument against the "but for" assumption is not being heard. In 2004 a state judge threw out a lawsuit against the Cabela's TIF by a Fort Worth citizens' group that claimed blight was never proven, and that the city was misusing TIFs in a prosperous area that needed no tax breaks for future development. The blight designation came from a pond and stream on the property. It was an odd designation, given that the property is in a prime development area and ponds and streams are not what one would classify as blighted.

The press releases and newspaper articles about the new Cabela's emphasize that the store is going to draw more people to Texas than visit the Alamo (the studies were done by Cabela's). The press release never mentions that a Bass Pro Shop store, part of a chain almost identical to Cabela's, is just 10 miles down the road. While Cabela's was negotiating its TIF with Fort Worth, it was also negotiating a TIF with the city of Buda, 120 miles away, outside of Austin. Cabela's got about $20 million from Buda, and the same tourist claims are being made there. If each Texas store is going to draw 4.5 million tourists, as the chain claims, that means 9 million people will be coming to Texas every year just to visit the two Cabela's stores.

"The notion that a hunting store would draw all these tourists is ridiculous," says Greg LeRoy. "But what is even more ridiculous is cities thinking that tax breaks are the primary reason businesses relocate or expand in certain areas. There are so many other factors at play--transportation costs, good employment available, housing costs and quality of life for executives--that the tax breaks like TIFs aren't very high up on their priority list. But these corporations are asking for them--and getting them--because everyone is giving them out. TIFs have become the standard handout, and the businesses have learned how to play one city off the other. Businesses would be stupid for not asking for them every time."

If TIFs continue to multiply at the present rate, we may see the day when every new 7-Eleven and McDonald's has its own TIF. That prospect may seem farfetched, but it wasn't too long ago that cities wouldn't even have considered giving up tens of millions of dollars in exchange for yet another store selling guns and fishing rods.�

Comments

nfl jerseys|11.7.10 @ 10:14PM|#

ltcjx

log in or register to reply

SheepskinUGG boots|11.20.10 @ 7:01AM|#

For the dispersion of stern agreement abundant abundant one year from the celebrities in the administration of the usual Jane has increased the tendency to assimilate the Ugg Boots Outlet boots. apparently among the best accuracy admired the Uggs Australia Outlet

log in or register to reply

قبلة الوداع|8.17.11 @ 9:23PM|#

thank u

log in or register to reply

دردشة عراقية|10.17.11 @ 11:54AM|#

asfasdfasf

log in or register to reply