It’s budget time and of course it’s going up again. Just like last year. And the year before. Surprisingly, the Parking Fund is going down $200,000 even though the city collected $80,000 less than it had planned on (no doubt thanks to Robin Hood and his merry misfits). Some have been quick to applaud the city bureaucrats in this reduction, but wait. The TIF tax portion went up $200,000. What the hell is a TIF tax? If all you saw was “tax” and you already knew it was something bad, then you would be correct. Here is a brief explanation in my LTE to the Keene Sentinel:
Tax Increment Financing is not “free money”
Who pays for Keene’s downtown parking?
If you were to ask city management, they would tell you it’s paid for through rentals, fees and fines. If you then asked them if the taxpayers paid into the parking fund as well, they would most likely tell you “no.”
This is a flat-out mistruth. Let me explain. This year, $1 million (47 percent) of the $2.2 million proposed parking budget will come from the city’s Tax Increment Finance (TIF) tax pool. This is a huge increase from $840,000 (34 percent) last year.
The TIF tax pool is generated from Keene’s two developmental districts and the revenue collected can only be spent in those districts. It cannot be spent elsewhere. The idea is the money will be put aside and used to improve the assessed value of these properties and therefore increase the potential tax revenue over time because, according to social engineer Mayor Lane, development in these areas would never happen unless they had a little help from the taxpayers. This is a ridiculous notion.
One of the biggest problems with TIF is how the money is spent. Right now, almost half of Keene’s TIF revenue goes to the parking fund. The other half is spent mostly on principal and interest. We’re talking about $2.4 million that could be going directly to the general fund to pay for city services, which would ultimately help lower the already unsustainable tax rate.
But instead it gets spent on snow removal.
So yes, the taxpayers do not pay for downtown parking directly. They do however pay indirectly in the form of a higher tax rate. In this way, our beloved central planners can look you in the eye and tell you your property tax isn’t used to pay the parking fund.
Well I’m sorry, but it is not the responsibility of the taxpayers to subsidize downtown parking. Those who use the parking should pay for the parking, and that includes city employees who receive free (i.e. taxpayer-paid-for) parking.
Downtown parking should be a completely self-sufficient department. As it stands now, even considering the increasing TIF tax subsidy, the parking fund will be $166,000 underfunded by 2016. And who will pick up the bill? You guessed it: the taxpayers!
This is your government at work. They are inept, unqualified and destined to fail every time. That is their very nature. It is time for the city to relinquish its monopoly on parking and hand it off to those better suited for the job.
Sell, or better yet, give those parking spaces to the downtown business and property owners and let them manage their own property accordingly, the same way I manage my own driveway in front of my house.
Sell the parking garages to third party investors and let them manage them on their own dime. It might be a bit messy at first, but the free market will prevail. City government, you’ve had your chance and you’ve failed; it’s time to move on and try new things.
Here’s a more detailed video describing how TIF works and the inherent problems that come along with it. There’s a pretty good chance your local municipality uses it or is planning on it.
Here’s video of Mayor Lane claiming developmental growth in Keene would never take place without the help of city planners and taxpayer subsidies:
Parking Fund 2014/15. Notice the negative balance in 16/17.
