TIF report
4:50 pm
Wed January 26, 2011

TIF report finds little regional benefit

Are public incentives likes TIFs and TDDs worth it? An updated report by the East-West Gateway Council of Governments says probably not.

"We're not challenging incentives," says the Council's deputy executive director Maggie Hales. "What we’re challenging with the findings of this report is whether what we’ve gained from our investments has been worth the amount of money we’ve paid."          

The report released today at the agency's monthly board meeting found that private development in the eight-county region  has gotten nearly $6 billion in incentives over the last 20 years. (The agency says that because of incomplete documentation, that number could be as high as $7.2 billion).

But job growth in the region has been anemic. Between 1990 and 2007, the rate was 0.8% - and that's before the current recession. Between 2000 and 2007, the rate dropped to 0.2%.

Of that $6 billion, about 80 percent went to subsidize shopping center developments. But in the 20-year period, that's led to just 5,400 new retail jobs. If you're doing the math, that's about $370,000 per new job.

And it didn't generate much overall tax growth either.

"We’re not growing," Hales says. "There’s not new wealth in this region that allows people to go out and buy more. What we’re finding is that when we’ve got new retail centers people shift their buying. They go to another spot, the newest mall, to do their purchasing."

Hales wants the Missouri and Illinois General Assemblies to tighten reporting requirements, so people know how many jobs a development created and how much public money it received.

The report, which is a more complete version of an interim review released two years ago, also included a survey of local governments. Of the 48 or so municipalities that responded, the results were stark:

  • Two-thirds described their municipality as "fiscally unstable," "in a fiscal crisis," or "in fiscal turmoil."
  • More than 50 percent of the financially stressed cities blamed the current economic downturn.
  • A quarter of the respondents said their city is not fiscally sustainable in two or five years. (The survey defined defined fiscally sustainable as: "the city will be able to consistently support the current level of services and undertake community improvements to sustain a quality of life for the residents.")
  • A third of the respondents said their city would not be fiscally sustainable in 10 or 20 years, including some cities that are currently fiscally healthy.

The numbers startled Glendale mayor Rich Magee, the current president of the St. Louis County Municipal League.

"We’re going to figure out to what extent that number reflects cities in our group and move forward proactively to help them, because our region can’t sustain a quarter of our cities going out of business in five years," he says, adding that the League is already working on a best practices manual for cities that should be out in February.