There is a dichotomy in the debate over industrial development in many communities. While nearly everyone recognizes the value of non-residential growth, there are those who believe a town shouldn't have to actually work to make it happen.
The truth of the matter is that in the world of business, everything is a negotiation. And when it comes to non-residential development, Tax Increment Financing districts (TIFs) have been established as an effective negotiating tool to speed the process.
In a nutshell, businesses willing to build in designated district receive property tax breaks for a certain number of years and the town takes on the responsibility of infrastructure improvements. These improvements are ultimately paid for through taxes on the increased property values.
On the surface, it seems as though the business owners make out like bandits. They not only get a tax break, but they reap the rewards from work the town pays for.
Such a view is short-sighted.
It is irresponsible for towns to make decisions based solely on the short-term results. The municipal leaders of today are entrusted with making decisions that will benefit the community for decades to come. Such is the case with construction of a new school or public safety building, which needs to be functional for at least 50 years. In the case of a TIF district, it is true that it might take several years to break even on the initial investment. However, the town will be collecting maximum property taxes indefinitely.
Critics of proposed TIFs in Londonderry point out that they won't result in "tax relief" or a property tax rollback for homeowners. This is true. The real benefit will be felt in the years to come, when flourishing industrial and commercial development in a community will help keep future tax increases to a minimum.
TIFs need to be structured carefully for maximum benefit and they need to be monitored to make sure provisions are being adhered to. But in the long term, TIF districts are a benefit to a community.
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That's what we think on this issue. What do you think? To share your views, log onto www.derrynews.com
