Yesterday, in response to a question from a local resident, I tried to explain that “Tax-Increment-Based Grants” (TIBG) were not giveaways, nor are they paid for by current taxpayers.
TIBGs are the most misunderstood term in the world. We really need to invent a new word for TIBGs. As part of the conversation, I gave an example of a vacant property paying $1000 in taxes per year in its current undeveloped state. Then, after it was fully developed, it would generate $32,000 in taxes per year (32x its current value). Then, after it is built and we get the tax revenue, we give some of it back to the developer for a fixed time (eg. 5 years) to offset their cost of cleaning up the vacant lot. After that, we keep all the revenue and the money goes back to lower tax increases across the whole city.
She responded, “So you’re just giving the developers back their own money?”
“Yes, exactly,” I said.
“Well why didn’t you just say that in the first place?” was her response.
It’s that simple.