"Self Financing" Bonds & Other Oxymorons

I knew it was just a matter of time before the K-Town politicos jumped on the "free" money tree called Tax Increment Financing aka "self" financing bonds. That tree was planted last November when a naive majority approved Amendment One. By voting for A1, the slight majority gave the cities and counties the "privilege" of borrowing millions of dollars through bonds, without asking the approval of the taxpayers. How smart was that?

Before the bonds are issued, a development district has to be created. The tax revenue generated by the district would go to paying off the bonds. The argument is that the development will cause the property values to increase, which would generate addtional tax revenue.

In a recent Independent Tribune article, Drew Masterson, from the First Southwest Company (which is one of the firms trying to "sell" the idea of T.I.F.'s) was quoted as saying..."If you're a taxpayer in a TIF, you don't know it."

What?

How could someone not know it? I bet when they open their first tax bill after their property values increase, they will know it. It is called a TAX INCREASE, no matter how you spin it!

Also, if the tax revenues go toward paying off the bond, who picks up the slack for the district's burden on police/fire protection; schools; roads and infrastructure (outside of the district)? The taxpayers outside of the district will pick up the tab.

What if the development district doesn't live up to it's expectations? What happens if the tax revenue generated is less than the bond obligation? Who picks up the slack. Imagine the amount of interest during the life of a 25 or 50 year bond.

Kannapolis should think twice before it places such a burden of debt upon her citizens.