Michael Rathbone

I’ll bet that’s what Phelps County officials are thinking as they set out to create a new tax increment financing (TIF) district in Rolla. This time they want a new marketplace on the north side of Interstate 44. Despite their optimism, policymakers should be aware that Missouri cities and counties have been using TIF for years now and the record of success just isn’t there.

Numerous studies show that the use of TIF does not lead to economic growth for the area and isn’t a financial boon to the jurisdictions that use it. For example, studies of the use of TIF in Iowa and Chicago both found that TIF does not deliver tangible economic benefits. A more recent study in Indiana found “. . . uniform negative impacts of TIFs on traditional measures of economic development such as employment, the number of business establishments, and sales tax revenue.”

So why do Phelps County and Osage Beach (which approved TIF for a senior living center earlier this year) think that their projects will be different in the face of so much evidence to the contrary? It would be a nice to know an answer to that question, but in the meantime, the proliferation of TIF districts continues.

It is easy to understand the appeal of using TIF to redevelop vacant property. If the project gets completed, a new development is in place instead of a deserted lot, and all without “costing” taxpayers. However, development can occur without TIF. It has in Olivette, and it can happen in Rolla, too. 

About the Author

Michael Rathbone
Policy Researcher
Michael Rathbone was a policy researcher at the Show-Me Institute. He is a native of Saint Louis and a 2008 graduate of Saint Louis University, where he earned a bachelor of science degree in biomedical engineering.