Thorny TIF issues could be speedily resolved

Public interest in tax increment financing in Cape Girardeau appears to be high, even though TIF projects have been put together in nearby Jackson and in Cape Girardeau County and Sikeston, Mo., with little fanfare.

Perhaps when the developers of Prestwick Plantation -- a 900-acre upscale subdivision envisioned around the new Dalhousie Golf Club -- first had the notion to pursue a TIF for their housing development, they presumed the process would be as easy as neighboring examples.

For whatever reasons -- lack of good public relations, public misunderstanding of TIFs, sour economy, failure to lay a good groundwork -- there has been considerable opposition to using the TIF mechanism for this particular project. In short, a TIF uses increased tax revenue from a development to pay off bonds sold by the developer so the developer has cash up front to fund the development.

One of the apparent misunderstandings is that a TIF would take all the tax revenue from the affected area, leaving the city, county and school district high and dry until the bonds are paid off. Taxing entities would continue to get the same tax revenue they currently get. In addition, the Prestwick developers are offering to use some of the TIF funds to give extra financial assistance to the city and school district.

Another misunderstanding is that anyone buying a home in the Prestwick development wouldn't have to pay property taxes as long as the TIF is in place. Those property owners would be obligated to pay their full tax bill every year.

Still another misconception is that the city would be liable if the development failed. The city would have no liability. Bondholders might lose their investment if the development flopped.

This is not to make a case for the TIF proposal. But this is the kind of information the Prestwick developers should have been prepared to disseminate -- widely and frequently -- at the outset.

In addition, the Cape Girardeau School District is justifiably concerned about how the TIF would affect the district.

Prestwick officials have publicly talked about a $4 million payment to the district, but school officials say they don't know about the timing of such a payment: Would it be up front? Or over a period of time? This confusion, it appears, is due to a lack of effort on the part of either the district or the developers to have any meaningful contact that could resolve this issue. The district complains the developers haven't responded to a letter it sent. The developers complain the district hasn't responded to its phone call.

The district could easily take control of this situation. All the president of the school board has to do is announce on what terms the district might be interested in a TIF. Would it take $4 million up front? Then say so. At least the developers and the city's TIF commission would know exactly where the district stands, and the developers would know where to start negotiating.

Pussyfooting around the TIF idea isn't going to accomplish much. It's too early to say if a TIF would be a good idea or not. But until some of the knotty issues like the one between the school district and developers are resolved -- and that shouldn't take long -- there won't be much real progress.