Saturday, August 13, 2011

Three unrelated things

Tax Increment Financing - TIF is a method to use future gains in taxes to finance current improvements (which theoretically will create the conditions for those future gains). definition from wikipedia as of Aug. 13, 2011.

School tax increases in Chicago - Homeowners are being asked to pay, on average, an extra $84 in annual property taxes to help plug Chicago Public Schools' $712 million budget deficit. From Chicago Tribune “City school tax hike greeted with frustration

The undereducated American workforce - The United States has been underproducing college-educated workers for decades. The undersupply of postsecondary-educated workers has led to both inefficiency and inequity. from Georgetown University Center on Education and the Workforce

TIF’s are great, except what they do is pull money that would have gone into the general fund for a city and reserve it for a specific area. this sounds great, but what it really does in the end is short change education. Hence the need to raise property taxes in Chicago to make up for the school budget deficit. In the end we all lose with an undereducated workforce.
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1 comment:

RAYBO said...

The TIF in essence borrows some money from general real estate taxes in the short term in order to help pay for apublic project. If the project increases the tax base by adding real estate to the tax roles, than once added it will now supply more money for schools and other public spending indefinately.
Also, only part of the tax dollar used by the TIF comes from the schools but the the amount of time it takes for the school funds to get paid back varies from project to project. Society must make a value judgment about the use of a TIF re-allocation of tax dollars. Also, spending dollars on education does not measure the effectiveness of the teaching.
Ray Sanders