The Yankee’s third baseman Alex Rodriguez has a 10-year, $275 million contract — surely he has enough to pay his property tax bill. However, because his new five-bedroom penthouse in New York City’s Upper West Side is located in a TIF district, he won’t have to pay any property taxes for the next 10 years.
If A-Rod can afford to pay $6 million for an apartment, then his property taxes shouldn’t be a problem. Why should New Yorkers who earn less have to pay the full cost of their property taxes in addition to his?
Furthermore, why is there a TIF district in Upper West Side? Isn’t this an area where development would happen anyway? If wealthy professional athletes are willing to move into the area, then undoubtedly it can’t be that blighted. The same thing happens in Saint Louis: The city is quick to label an area as “blighted,” even if it doesn’t fit the definition.
Cities that use TIF face a significant reduction in revenue: New York City forgoes $900 million each year, and Saint Louis has missed out on $600 million up through 2009. This is largely why Saint Louis has to raise taxes on those who remain in the tax base — such as the earnings tax and trash fees. If each city stopped carving out sections in its tax bases, it could assess a lower tax rate on its residents.
Show-Me Institute scholars and staffers have shown that TIF harms regions. The East-West Gateway Council of Governments report, which I have discussed before, found that TIF fails to boost development and economic activity in a region, and it’s particularly harmful to neighboring municipalities.
