Two new FAQs seek to demystify two widely used economic development tools
Here at Good Jobs First, we get load of questions about Tax Increment Financing, a widely used yet poorly understood economic development subsidy.
How it works can sound complicated, yet the developers who champion it make it seem so simple –look at this free-lunch way to grow our local economy and create jobs!
The reality in no way resembles that oft-repeated narrative. With that in mind, we tried to answer our most-asked TIF questions.
We start with basic questions – such as, What is tax increment financing? Who has the power to create TIFs? Where does the money go? – and then take you through the ins and outs of TIF bonds, reporting and accountability, and our recommendations for reforms to make TIF more effective.
We’re hopeful this guide, laid out in four parts, helps demystify TIF, so you can ask the probing questions about true costs and benefits. And more importantly, what must change so economic development programs like TIF actually do what they were originally intended to do, and that’s help boost struggling, historically disinvested communities.
Reach out if we’re missing anything.
Opportunity Zones: An FAQ
And speaking of programs supposedly meant to help struggling, disinvested communities, we turn now to Opportunity Zones (OZs). Created as part of the 2017 Tax Cuts and Jobs Act, OZs allow wealthy investors to reduce their capital gains tax liability by investing in real estate (condos or office space), businesses (manufacturing, mining) or other enterprises.
Today, there are 8,762 OZs located in all 50 states, the District of Columbia and five U.S. territories. Nearly all of Puerto Rico is an Opportunity Zone. Rather than help economically depressed areas, we’ve seen the program simply direct investments to already gentrifying communities, be used for upscale, luxury development or to simply increase profits for projects long in the works.
We hope our new OZ FAQs can help you understand the basics of this program and give you ideas for telling stories about them in your backyard. We also have tons of other OZ resources here.
Again, reach out if we missed anything.
Until next time.