Alan Herbert: Tax increment financing buys transit
Herbert has argued for years that TIF offers TransLink a way to obtain billions of dollars in transportation funding without imposing parking taxes or jacking up homeowners’ property taxes.
“It’s not adding a new tax,” he said. “It’s taking an existing tax, which grows naturally, and dedicating that growth to TransLink. The only disadvantage is that it requires politicians to agree that they’re going to take that increment and dedicate it to transit.”
There are not many politicians who like dedicating future taxes. It looks like a “hostage to fortune”. Dedicated gas taxes are used in the United States to fund transportation – initially it was only interstate highways but the disadvantages of that became apparent soon enough. And now it look slike gas tax will have to be replaced as a source of revenue much sooner than anticipated.
If you go to the Lincoln Institute of Land Policy we page you will find 34 papers on TIF. It seems to me that the jury is still out on this technique. In my opinion politicians will always feel that future increases in revenue should be theirs to divvy up as they see fit – not be bound by the priorities of earlier administrations. And I seem to recall many municipal assurances at reassessment time that simple increments in valuation did not mean that property owners were obliged to pay more tax.