Two major Rapid City developments are moving forward with city council approval, but not without some complications.
After an error voided two previously approved Rapid City tax districts, the city council has reapproved their passage.
Tax increment finance, or TIF districts allow taxpayer funds to pay for infrastructure in exchange for additional developments by the eventual occupant – think roads, sewer, or maintenance.
Rapid City’s reapproved TIF districts will support the Libertyland theme park and the Catalyst District.
State law mandates any proposed TIF be published in the local newspaper of record ten days prior to votes by the council.
Ultimately, the information relating to a similar but separate project was submitted to the Rapid City Journal, thus voiding those TIF votes.
Once again, those votes had to go through the process from scratch, including public comment periods. Elevate Rapid City CEO Tim Johnson says this isn’t a complicated issue.
"The only tool you have to do economic development, to build infrastructure as it grows, is TIFs," Johnson said. "If you decide to take that away, you really will have bad homes, you really will have bad infrastructure, and you will start to lose people.”
TIF districts come with baggage, though, with many asking why multimillion or billion-dollar corporations can’t fund infrastructure themselves. Others are concerned with the diversion of taxpayer dollars from schools, police, and fire without generating enough new revenues to compensate.
Some of those critics are from the political right. Republican Rapid City Senator Taffy Howard reiterated her staunch anti-TIF stance at the city council meeting. She says it’s wrong to describe yourself as a fiscal conservative while supporting TIF districts.
"The average amount of those (active) TIFs is $12.6 million," Howard said. "Only four of those TIFs have any discretionary funds. Libertyland has $47 million in discretionary funds. That’s not for capitol costs, which is a normal use of a TIF. That can be used for anything short of a residential structure. Taxpayers will be subsidizing a private development.”
The Libertyland TIF passed 7-2, while the Catalyst District passed 8-1.
