The One-Size-Fits-All Columbia Candidate Survey, part 2 cont.
Welcome to the third annual One-Size-Fits-All Columbia Candidate Survey, where city council and school board candidates answer questions about issues that affect not just one, but BOTH organizations. In this part, we ask 2nd Ward city council candidates Jason Thornhill and Allan Sharrock:
Does Economic Development = Property Development?
TDDs, TIFs, CIDs, Chapter 100 bonds. To look at our present palette of economic development incentives, you'd think that the only economic development Columbia and Boone County want to incentivize is property development. Nowhere do we see incentives for high tech, manufacturing, or service businesses that aren't building something, usually on raw land.
We have no local incentives for historic preservation; and homebuyers have recently been stuck with a slew of new costs and fees that can no longer be offset. The small entrepreneur, who's just starting out, gets nothing but a lump of coal and a tax bill. Google, after all, didn't start out by building a huge new headquarters. And Steve Jobs started Apple in his partner's garage.
CANDIDATE QUESTIONS -- 2nd Ward City Council
Q1. Do the benefits we receive from the development of strip malls and shopping centers justify the incentives we provide (primarily via TDDs and ultra-low property taxes on land)? If so, why? If not, why not?
I suppose you could find arguments for and against TDD’s and their intended benefits all day long. What I believe is important to consider is that the consumer does have a choice with regard to whether they want to support an establishment in a TDD. Clearly posted tax premiums in each store identify just what the cost is to a purchaser. At that point, they can make a decision about whether to support that area or not.
I believe the key to TDD’s is to closely regulate the approval of them, so that they do not become the standard. They have their place in the world, but like anything else (particularly something related to tax abatement and the like), they can be abused and unsuccessful if not properly handled.
ALLAN SHARROCK
The city has little say over TDD’s. There is a lack of oversight with TDD’s and this is a place for reform at the legislative level.
CID’s are a semi-better version of TDD’s because the city has more input on how the revenues may be spent. As a teacher, I am deeply concerned about the upcoming TIF proposals and their impact upon the schools. The district is already short on revenues and I do not think we can afford any more cuts to the budget.
We currently do not have Chapter 100 bonds within the city limits. If Columbia implemented Chapter 100 bonds, businesses would locate within the city. This would increase our property and sales tax revenues. Currently businesses can build on the edge of the city limit, reap the county benefits, and have a good customer base. They know eventually they will be annexed within the city and homes will be built around them. Until this time we have lost their taxes. With the city not having Chapter 100 bonds, we are contributing to urban sprawl.
The development of businesses, strip malls, and shopping centers generates jobs and sales tax revenues that we need for our budget. I do think we must remain competitive with other cities on the incentives issue. We are in a recession and if we are not actively seeking out employers our unemployment rate will continue to rise.
Q2. If the tax incentives we've been providing all these years really work, why do you think the county, city, and school district are always short of funds?
ALLAN SHARROCK
To answer this question we would have to study the spending habits of each entity in relation to revenues generated. Schools can be short of funds due to a population increase, hiring practices, raises. etc The city, for the most part, has done a good job in the past by working within their means. As a councilman I will always be a good steward of your tax dollars. I do not believe now is the time to ask for any new taxes.
JASON THORNHILL
I’d be interested to learn just what the actual dollar amount, or cost if you will, of tax incentives has been over the years.
I suspect that the problems you find in government and school budget shortfalls can be attributed as much to poor management, underestimating and plain bad decision making as anything related directly to the amount of money that is purely a loss due to tax incentives.
Things that come to mind are the property acquisition spree the county went through while acquiring property downtown; and the Phyllis Chase-led debacle with regard to the school district money woes.
Q3. Does Economic Development only equal Property Development? If not, why do we subsidize it so heavily? And what other types of business and entrepreneurial activity should we be pursuing?
JASON THORNHILL
Most certainly not. If not, why do we subsidize it so heavily? I think the common misconception is that we throw piles of money at development in anticipation of landing new employers.
We’ve not done enough to incentivize employers to come to Columbia, e.g. a rundown local airport unable to service companies with adequate flight scheduling and runway length, along with a lack of “shovel-ready” sites within the city limits, and a planning approval process that can run off even the most confident applicant.
Does that mean we should only look for those companies who want to build? Absolutely not. That’s why I feel like we should work with REDI to formulate a more attractive incentive program that attracts those companies, both locally and from outside our area who will make use of the vacant buildings we have here now.
Assuming, as we must, that most buildings, save for empty shells, will need to be retrofitted to accommodate a new employer, this is where we could certainly look to provide assistance to those wishing to expand or locate a business here. On the other hand, we can’t make it so difficult for a business that wants to build here that they’d rather go elsewhere.
It’s a fine line, but consider the last time you read about a corporation other than a retail store or restaurant giving Columbia serious consideration. Folks like to say we were close to landing an IBM tech support center. But we were not. For anyone who thinks we spend too much incentivizing this type of employer, consider this: Dubuque, IA spent about $50 million between private and public entities (to be paid back over a 20-year period) to bring that 1,300-employee operation to their city.
What other types of business and entrepreneurial activity should we be pursuing? I’d love to see our city work with the University to encourage more entrepreneurial activities. Small business incubators and departments dedicated to assisting small business owners is a good start. The risk/reward factor is something that has to be considered when utilizing public monies to support development of small business.
This is likely the reason we are more willing to provide money to something that appears to be more of a “sure thing”. As a small-business owner myself, I know how hard it is to get a business off the ground and keep it going. The deck is stacked against the small entrepreneur and for us to become a new-business friendly community would be a great thing.
ALLAN SHARROCK
One of the major costs for the start up of a business is the initial property expenditure. If costs are low then the business will have a lower overhead and can focus on hiring more workers and building quality developments.
I have been clear in my campaign about seeking out potential employers that will hire high school dropouts and non-degree workers. Troubled youths today will not work at fast food restaurants for minimum wage when they can sell drugs and make thousands more. I want to provide jobs that people can be proud of while making decent wages. I am not advocating we compromise our city with smoke stacks, but some manufacturing jobs are needed.
Q4. What impact do you think heavily subsidizing one type of economic activity with tax dollars has on the average homeowner or taxpayer who rents, especially when they are the first people asked to pay higher levies and taxes?
ALLAN SHARROCK
When citizens are asked to pay higher taxes and levies, they can voice their opinion during council sessions or on the ballot.
I believe the role of a councilman is to be a steward of the people and I will consider their input heavily. Columbia has some of the most informed voters and I trust their judgment.
JASON THORNHILL
As with any taxpayer subsidized activity, the return on investment has to be carefully considered. We have to remember that without a strong tax base, we will not have the amenities that we all enjoy so much (parks, trails, art etc.). Economic development must include attracting new jobs (sometimes this will mean building as well), retaining and expanding jobs within existing businesses and developing new business by encouraging entrepreneurship.
I’m afraid at some point, we will all be “taxed out”, but the facts are simple. Without continued growth of our employer base, the weight of road, public safety, utilities and amenity maintenance falls upon the taxpayer. If we have more employers here, we have more employees. In turn we’ll likely have more property owners and more folks spending money at local vendors. We must continue to evolve as a city and community. If we do not, we will fall further behind those that do.
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