School districts throughout the state are spending tens of millions, if not hundreds of millions of actual tax payer dollars, to educate the additional students created by the abnormal growth in their student populations caused by the use of Tax Increment Financing (TIF). At the same time, tens of millions, if not hundreds of millions of actual tax payer dollars, that would normally go to educate those students, are being diverted from the schools affected to make sure that the developers who created the abnormal growth causing the increased student populations get, not only their investment back, but a nice profit. It’s nuts, just plain nuts!
In running the city of Branson, its biggest source of revenue is sales tax receipts. In general terms, the current year’s figures released by the city of Branson indicate that its two latest TIFs, Branson Landing, and Branson Hills, generated over a hundred million dollars in retail sales and millions of dollars in sales tax collections during the year. The TIF only captured 50 percent of the sales tax collected within the TIF District. This leaves 50 percent of the sales tax collected for the city’s use in providing the services necessary to service that growth.
In running the Branson School District, its biggest source of revenue is real estate taxes. In general terms, the current year’s figures released by the Branson School District, indicate that Branson’s two latest TIFs, Branson Landing and Branson Hills, generated tens of millions of dollars in assessed value and hundreds of thousands of dollars in real estate taxes during the year. The TIF captured 100 percent of the real estate tax collected within the TIF District. This leaves ZERO percent of the real estate taxes collected for the Branson School District’s use in providing the services necessary to service that growth.
Although the Branson TIFs are used as an example and, in an Ole Seagull’s opinion, the Branson Hills TIF could be used as the poster child for TIF abuse, it’s not about Branson Landing or Branson Hills, the city of Branson or the city of Kishnif. It’s about the inherent unfairness and lack of logic in the way that Tax Increment Financing (TIF) deprives local school districts of the funds needed to service the educational needs created by the very growth that the TIFs are being used to create and finance.
In referring to the revenue lost to school districts, through the TIF capture of real estate taxes, there are some who say, “How can they lose money they never had.” That might be a halfway valid statement if everything was revenue neutral but it’s not. The artificially induced growth, caused by the use of the government sponsored and supported TIFs, results in the abnormal growth of student populations within the school districts affected.
The math is easy, if it costs a school district $x per student simply multiple that cost per student times the number of estimated additional students that the abnormal growth caused by the TIFs created. As an example, The Branson Hills TIF plan projected 1,250 permanent jobs with an annual payroll of $19.2 million or about $15,360 annual salary per year. What is the Federal Poverty Guidelines for a family of two adults and two children?
But wait, the Ole Seagull digresses. There has been no specific study done analyzing the abnormal growth within the Branson School District because of the Branson Hills and Branson Landing TIFs. However, most reasonable people would agree that the thousands of jobs generated by those TIFs are going to add some additional children to the district above and beyond those that would have been added without the TIF impact. It takes about $5,598 in local revenues to educate each child for one year. If 100 additional children per year are added the additional cost would be $559,800, 200 additional would be $1,119,600, etc.
The precise number of additional students is not as important as the result. Whatever the number of additional students, the Branson School District, and other similarly affected school districts, must service the educational needs of the additional students at the very same time that 100 percent of their primary source revenue for meeting those needs, real estate taxes, is captured to pay the very TIF causing that need. It’s nuts, just plain nuts.
