The Wall Street Journal recently published a story about the very controversial Citadel Project in Kansas City. If anything, the article understates the problems with the project. For example, it makes no mention of Tax Increment Financing (TIF) for the project, other than a reference to bond sales, which the reader will not automatically assume is a taxpayer subsidy. (It is.) Unfortunately, the article downplays the use of subsidies as a part of urban reinvestment across the country.
That aside, it does a nice job of chronicling the myriad of problems with the Citadel Project. TIF will always be a political process, and as such, political games, favors, and targets will always influence the process. It’s inevitable, and all the more reason not to have government involved in those choices in the first place.
TIF is one of the prime reasons Missouri is littered with failed projects like this. TIF allows projects that should not go forward to do so, or it causes the failure of certain shopping centers because it subsidizes their competition. Most of all, by subsidizing something (retail sales) that has absolutely no need to be subsidized, it distorts our overall economy. Missouri needs TIF reform just as badly as we need an income tax cut.
