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Peter’s Take: A Tiff About TIF

By Peter Rousselot - ARLNow.com

Thursday - 11/21/2013, 1:00pm  ET

Peter’s Take is a weekly opinion column. The views and opinions expressed in this column are those of the author and do not necessarily reflect the views of ARLnow.com.

Peter RousselotAt the Nov. 16 County Board meeting, the board voted 4-to-1 to hold a public hearing on Dec. 14 to “consider establishment of a tax increment financing area and fund to help finance affordable housing initiatives in support of the Columbia Pike Neighborhoods Area Plan.”

The board should vote NO on this proposal in December.

Why is there such a tiff about this TIF?

As a county staff report explains, TIF is a financing mechanism that captures “the projected increase in property tax revenues created by… development… It redirects and segregates the increased property tax revenues that would normally flow to the General Fund so that they can be used for a specific purpose.”

The Board Should Defer A Final Vote Until After It Approves A General Policy on TIF

The same county staff report acknowledges that “the County Manager will be proposing a County-wide TIF policy as part of a comprehensive review of the County’s financial and debt management policies, last updated in 2009.” But, staff recommends that the board go ahead and approve the Columbia Pike TIF now because staff cannot imagine that the County-wide review will change staff’s mind about this TIF.

The staff has the cart before the horse.

TIF is a deservedly controversial form of financing because every time it is used it takes tax revenues away from the county’s general operating budget. TIF curtails the board’s flexibility to adapt to changing economic conditions. Given the new normal of Arlington’s budget situation, no further uses of TIF should be approved until after the comprehensive review is complete and the public is heard.

This TIF Is Highly Problematic

County staff is straining mightily to find a way to pay for an unrealistic goal that the County Board adopted last year: to preserve every single one of the 6,200 market rate affordable housing units defined in the Columbia Pike Neighborhoods Area Plan.

It was a big mistake for the County Board to adopt this goal before having a robust budget discussion with the Arlington community about:

  • the priority of this goal compared to all other community priorities
  • the benefits of this goal compared to its costs

This goal should not be shielded from the competition with other goals that takes place as part of Arlington’s annual operating budget review.

Peter Rousselot is a former member of the Central Committee of the Democratic Party of Virginia and former chair of the Arlington County Democratic Committee.