Mizzou professors, downtown business leaders, County Assessor join chorus against costly incentives

COLUMBIA, 11/18/12 (Beat Byte) -- Fed up with what many believe is Boosterism run amok, business and government leaders in Columbia and Boone County are backing away from two controversial incentive programs that use blight designations to secure tax breaks: Enhanced Enterprise Zones (EEZ) and Tax Increment Financing (TIF).
Editorials from respected business types have appeared in area newspapers criticizing the schemes.
The Columbia City Council has introduced legislation that could become a national watershed: a Charter Amendment prohibiting use of incentive-related blight for eminent domain in private development.
Skepticism, questioning, and concern have dominated recent discussions about EEZ on the KFRU Sunday Morning Business Times Roundtable, most notably from Columbia Daily Tribune business columnist Bob Roper, a show co-host.

And in a surprise statement to the Tribune, Downtown CID director Carrie Gartner -- a previous TIF supporter -- "said the recommendation for a downtown TIF district is also worrisome for the CID because of possible effects on revenue from its sales tax." The Community Improvement District (CID) levies a special sales tax, and is refusing to endorse a 3-year-old planning charrette in part because of the TIF tax breaks it recommends.

Criticism from these new quarters comes after 9 months of staggering citizen opposition that has cited Columbia's ugly 60-year history with blight, and the loss of the black business community to eminent domain connected with "urban renewal" tax incentives in the 1950s and 1960s (a main reason media comparisons with the EEZ in Centralia fall short).

DeMarco was right

Referencing a phrase this author has used, "TIFs are for losers," said a downtown business owner who asked to remain anonymous. "Fred DeMarco was right. It took some real balls for him to speak up, but the timing is getting better. Everyone I know says these things are as dead as automated trash collection."

A downtown developer who has owned several prominent buildings, DeMarco made the rounds with a sharply-worded condemnation of TIF that first appeared in the Columbia Heart Beat, then subsequently in the Columbia Missourian and Columbia Daily Tribune.

"Downtown Columbia is the last place in a 100-mile radius that needs a TIF," DeMarco wrote, calling it little more than a taxpayer bailout of bad investments.

Anti-TIF sentiments are even showing up on the home page of Boone County assessor Tom Schauwecker, who earlier this year publicly condemned their use at a meeting about economic incentives. Rock Hill offers up lesson in danger, folly of TIFs, and Polk County Cities Show Problems with TIF, are among articles Mr. Schauwecker has posted.

Not so E-Z

Two Mizzou economics professors blasted EEZ as an unproven investment vehicle that has non-expert citizen boards trying to pick winners and losers among businesses they know nothing about.
"The Enhanced Enterprise Zone (EEZ) in Columbia is a bad idea," Joseph Haslag, Ph.D. wrote in an August 2012 Columbia Business Times editorial that also appeared in the Columbia Daily Tribune. Haslag directs the Mizzou Economic and Policy Analysis Research Center.

And while early research about EEZ was positive, later research with improved methods and data "show very few discernible impacts," said applied economics professor Judith Stallmann, Ph.D., debating the zones with REDI director Mike Brooks on an August CAT TV program.

Their critiques followed dozens of reports about the ham-handed beginnings of Columbia's EEZ, completed with misstated facts, misbegotten statistics, and utter falsehoods about EEZs in other Missouri cities like Rolla.

Walking it back

Even Hank Waters can't seem to muster the enthusiasm he displayed in February, when the Columbia City Council passed an ordinance blighting over 60% of the city and parts of the county to qualify for EEZ.
Back then, the Columbia Daily Tribune publisher shellacked EEZ opponents. But in two editorials since Nov. 13, he's now arguing for vastly scaled down zones and narrow definitions of which businesses qualify for tax breaks.
Constrained words like "limit," "minimize," and even "deserves serious skepticism" have replaced over-the-top rhetoric like "persistent band of conspiracy theorists jumped on the council action as imagined proof that a predatory City Hall is preparing to seize properties from hapless local owners through condemnation."
"If tax credits and abatement should be provided at all, why not draw a minimal EEZ tailored to this prospect, minimizing the political angst over 'blight' and limiting the territory opened up for controversial tax benefits?" Waters wrote Tuesday.