Omaha's Screwy Planning Dept.

TIF Exempts Developers From Property Evaluation Increases

Omaha World Herald, Public Pulse, June 6, 2024, David K. Fanslau of Omaha’s Planning Department wrote the following defense of TIF, Tax Incremental Financing. He also references this TIF map which is missing a color legend of TIFS https://planninghcd.cityofomaha.org/tif

I appreciate his honest explanation but notice the three words I highlighted above? These three words eviscerate all the arguments in his letter. Apparently he does not know what “fungibility” means

(https://www.investopedia.com/terms/f/fungibility.asp).

Basically, TIF freezes out any property tax increase and tax-related property evaluations saving the developer money for several years, and therefore deprives taxing authorities of potential increased revenues (until the TIF expires). The end result forces taxing entities to make up the difference somewhere else.

In addition, due to high property tax levies, more and more developers see a great necessity in seeking TIF. I am not faulting them for doing so, nor am I fully opposed to the idea of TIF, as it is merely a conditional tax relief. However, the amount of TIF approvals is now getting out of hand and is a symptom of deeper problems with the taxation systems. At the same time, most TIF approvals appear to apply to only a small portion of the City, east of 48th street. See map below:

In addition, many of these TIF approvals are going to apartments. Why apartments? Because renters do not pay directly into the property tax system. The landlords pay the property tax and pass the cost on to the renters in the form of rent. This creates a horde of constituents who never see properties and therefore never complain about taxation but instead demand more government services.

At the same time, TIF discourages property taxing entities from lowering the mill levy impacting residential homeowners who pay property taxes. If you know your property tax revenues are not going to grow very fast due to TIF, you are not going to make an effort to lower the levy substantially.