Small Town Crony Capitalism

Serinus Canaria News & Views Leave a Comment

One of the reasons that drew me to choose Exeter as my new home was its charming downtown with its iconic bandstand serving as both a de facto traffic controller and a center piece dividing city hall, town hall and the string of businesses along Water Street.

To my alarm there are interests in town who would rather muddy these lines so clearly divided by our bandstand. In an effort to capture the same downtown atmosphere afforded to our neighbors in Portsmouth and Newburyport, these same interests are seeking to implement a Tax Incremental Finance (TIF) district in order to pay for improvements such as burying power lines, expanding sidewalks and installing elegant lamp posts to name a few worthwhile projects.

Essentially what a TIF does is divert future tax revenue increases from a designated district into an exclusive account to be spent on improvements such as those mentioned earlier. It should be noted that the revenue generated from these tax increases would otherwise be collected for the funding of municipal, county and education and would instead go towards improvements directly benefiting property owners and businesses in the district, some of whom are not even Exeter residents. This diversion in taxes would increase the tax burden on the vast majority of Exeter tax payers, who are still stuck having to fund these aforementioned liabilities.

district

Waterfront Commercial – WC (yellow) exclusive beneficiary of funding from outlying districts.

Private business development should not be subsidized at the expense of public money. Aside from this fundamental violation, there are other pitfalls inherent to implementing a TIF, such as the great potential for developers to collude with town officials in granting contracts and the tendency to gerrymander districts larger than the beneficiary district (see figure), thus funneling more funds away from the liability mix and into the pockets of connected developers and exclusive businesses.

Implementing a TIF is not the solution to enhancing our downtown, it must either be done as a concerted effort by private business or presented as a town warrant and funded with general tax dollars if the public deems it worthy. Though the latter has already been tried and this appears to just be the latest scheme…

Exeter has proposed two projects in the recent past (2005 and 2008) for general tax dollars to support a downtown improvement project.  The first project was not supported by voters, the second project, in 2008 , was postponed and not presented to voters on the Town Warrant. (http://exeternh.gov/bcc/downtown-area-tif-district-proposal)

Exonians didn’t want it then and don’t want it now.

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