I spoke of Congressional pols ignoring these TAX UNIFORMITY LAWS when they send out all of those corporate tax credits targeting any corporation they want. Most of Federal stimulus from Clinton/Bush/Obama made global corporations today by doing just that while killing the ability of small businesses which of course kept having taxation rise. Social Democrats did not do this---we enforced Uniformity Tax Laws---it was the Republicans with Clinton/Obama neo-liberals.
I want to look closer to state and local tax policies that have ignored this as well these few decades. We saw the corporate TIFs====the Enterprise Zone tax breaks that of course were sent to global corporations. Citizens of Maryland need to see the same uniformity tax law stands in our Constitution. Maryland Assembly tries to loophole this to death by claiming the right to divide according to sub-sections of real estate or business BUT THAT IS NOT WHAT TAX UNIFORMITY LAW represents.
CONSTITUTION OF MARYLAND
ADOPTED BY THE CONVENTION
DECLARATION OF RIGHTS.
That the People of this State have the sole and exclusive right of regulating the internal government and police thereof, as a free, sovereign and independent State.
Art. 15. That the levying of taxes by the poll is grievous and oppressive, and ought to be prohibited; that paupers ought not to be assessed for the support of the government; that the General Assembly shall, by uniform rules,
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I love to hear Carl Stokes, a candidate for Mayor of Baltimore state ----WHERE DOES CINDY WALSH GET THOSE NUMBERS?------ when I state over and over the Baltimore City school building bond will cost taxpayers $1 billion over 30 years in Wall Street fees----and that is without all the fraud and manipulation of interest rates. Carl and Baltimore City Hall knew this bond deal was bad for our schools and the city-----yet they pretend they don't understand this. Baltimore Maryland Assembly pols pushed this as well---
This issue ties to Wall Street and Federal Tax Uniformity. Wall Street famously shouted as US citizens called for taxing Wall Street to recover trillions of dollars in fraud------YOU CANNOT TAX ONLY WALL STREET BANKS BECAUSE OF THE TAX UNIFORMITY LAW----ALL BUSINESSES WOULD NEED TO BE TAXED! Oh, so Wall Street recognizes Federal Tax Uniformity when it is directed at them.
Tying Baltimore taxpayers to all of this bond debt will have Baltimore citizens with growing tax rates and as those tax rates rise------we already see Baltimore City Hall carving out all kinds of exceptions as to whose taxes will rise. As I stated yesterday-----if you are a winner today----you will be a big loser if this continues.
I posted this article from another state-----this Loudon County is Virginia I think-----Baltimore media said the same thing when this Baltimore School building bond was announced----$1 billion in taxpayer fees to get $1 billion bond. This is public malfeasance AND it violates tax uniformity laws in staging who will end paying all these taxes.
This is one example of what a Mayor of Baltimore would do to bring revenue back to city coffers----we never needed that bond. I heard Baltimore Development say-----spend this money fast meaning the repairs to the few schools receiving this funding----because it was all illegal.
Vote no on school bond
Friday, Oct. 29
Ten days before the election, Loudoun County Public Schools management mailed a flyer to all the postal patrons in the county at taxpayer expense. The flyer tells one side of the story – their side – which supports the $27.82 million bond sale to help build a new elementary school.
The taxpayer side of this discussion has not been presented. Loudoun County has incurred a debt through the beginning of fiscal 2012 of $1.2 billion – $4,000 of debt for each of the 300,000 residents in Loudoun County. The annual cost to service the interest on this debt is $160 million. That’s $750 to $1,000 per year of additional tax for each taxpayer just to pay the interest on this debt.
Rest assured, things will get worse. The current Loudoun County fiscal plan envisions growing this debt to 1.4 billion by fiscal 2016, with an increase in the service costs to $200 million per year. Loudoun taxpayers will pay more than $1 billion in interest through 2015.
Much like the federal government, Loudoun County government is in debt beyond its means to repay. Loudoun is living beyond its means. The fiscal dishonesty exhibited by the Loudoun County Public Schools management in advocating the bond issue should be a concern to every taxpayer. To bring the subject up 10 days before elections ensures that no discussion of both sides of the issue will be possible. We have been there and seen that before. We all want the best education system for the students in Loudoun County. This is the canard the LCPS management advocates in telling one side of the bond referendum story.
Loudoun taxpayers can no longer afford empire-building on the part of the school system. LCPS needs to learn to live within their means like the rest of us
The day of big government may be over, but only because the day of gigantic government is coming. Someone has to urge voters to vote no on the proposed bond referendum. Unfortunately, the apparently intentional timing by LCPS makes it difficult to spread this message.
Joseph Robert Mayersak
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'Video: Don’t Let Property Tax Plan Derail PA Schools'
I wish this article was FB friendly but please take time to go to this article and watch the video-------here you see a PA school system understanding that tying public school systems to such debt-----and it will be tied to all Baltimore taxes including PROPERTY TAXES as this article states. Why was there absolutely NO PUBLIC DISCUSSION ON THIS ISSUE IN BALTIMORE? Well, my Citizens Oversight shouted to all justice and education organizations and pols exactly this BEFORE this bond issue was passed. Again, this will become an TAX UNIFORMITY ISSUE as Baltimore already ignores this uniformity in property taxes. What is most important is this------the goal of deregulating this UNIFORMITY OF TAXATION is tied to the power of global corporations controlling how citizens are taxed in the future--US International Economic Zones like Baltimore will be ruled by this global corporate tribunal writing all public policy with our Congressional pols installing it.
Now think-----where does a city get city funding for public schools? Partially from property taxes. When our public K-12 is currently being privatized to corporate charters-----are we sending our property tax to PUBLIC SCHOOLS? Of course not----WE THE PEOPLE will be supporting global corporate campus schools. Remember, this school building bond in Baltimore does the same as this article from PA states-------part of all Baltimore City school funding will go to service this Wall Street deal that was not needed in the first place. Baltimore had plenty of revenue to rebuild all public schools----this bond was attached to make sure these public schools defaulted in the bond market collapse to those Wall Street investors tied to those bonds. THAT IS FOR WHOM BALTIMORE CITY COUNCIL, MAYOR, AND BALTIMORE MARYLAND ASSEMBLY WORK WHEN THEY PUSH THESE DEALS
I do not necessarily agree with all this PA organization pushes in policy---I simply see where they recognize the same problems. As Maryland reduces/eliminates its state funding of public schools as Mike Miller was heard saying will happen-----we see taxation at the Baltimore level especially for public schools becoming unbearable. What is the solution says Baltimore Development Corporation whose goal is to send our public schools to corporations? PUBLIC PRIVATE PARTNERSHIPS OF K-12 AS CORPORATE SCHOOLS.
Video: Don’t Let Property Tax Plan Derail PA SchoolsBy Chris Lilienthal, Third and State
The future of Pennsylvania schools – and the quality of education every child receives – is at stake in a property tax proposal in Harrisburg.
The plan to swap property taxes for higher state levies will drain billions from Pennsylvania classrooms within a few years. Over time, it increases funding inequities across districts and makes it harder for future graduates to compete in a 21st century job market.
There is a better way. Watch our new whiteboard video to see how we can strengthen our schools, make funding more equitable, and address property tax concerns.
Good schools are vital to every community and its economy. Yet the real problem, as our video explains, is that Pennsylvania trails most other states when it comes to state funding for public schools. By investing more state dollars in education, Pennsylvania can improve its schools and ease the pressure on property taxes.
In other words, we can have good schools AND help people having trouble paying their property taxes.
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I want to out some progressive posing on this issue of Robin Hood tax. The grassroots like the Nurses Union really want this and have good intentions. This tax needs to be far higher---in Europe I think they are going with 1-2% financial transaction tax. So this is pennies on the dollar in what we need to recover trillions of dollars in Wall Street fraud. Wall Street responds by saying----YOU CANNOT TARGET ONLY WALL STREET BANKS WITH A TAX-----Tax Uniformity they say. This is the progressive posing by Congressional pols in this video and the 1% shown supporting this---Gates, Soros, and Sachs-----and REAL NEWS and all national media allow this progressive posing----TRANS PACIFIC TRADE PACT INCLUDES WRITTEN POLICIES THAT WILL NOT ALLOW GLOBAL BANKS TO BE TAXED-----THIS IS COMMON KNOWLEDGE. So, when you have Congress pushing this bill which is very needed-----media and pols know they are already FAST TRACKING TPP which will negate all of this along with the Frank Dodd Wall Street reforms. Clinton neo-liberals and Obama knew TPP included this the entire time they were writing Wall Street reform----knowing none of it would be enacted once International Economic Zone and Trans Pacific Trade Pact was enacted.
After the Great Crash that brought the Depression FDR and Congress passed huge taxation on rich and corporations to recover all that fraud-----this is how today's Congress reacts to just a fraction of a tax on Wall Street because----today all Democrats are Clinton/Obama neo-liberals.
Support for Robin Hood Tax Growing, but Majority of Democrats Not On Board
Robin Hood tax supporters National Nurses United, economist Jeffrey Sachs, and European Parliament VP tell Congress to support "no brainer" tax on Wall Street - October 31, 2013
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Supporters of a tax on Wall Street financial transactions gathered on Capitol Hall last Wednesday to put pressure on Congress for its adoption.
The tax, included in the Inclusive Prosperity Act, would charge 0.5 percent on every stock trade, generating an estimated $350 billion in new revenue each year.
“Whenever we go to our communities and the representatives that are elected in Congress to clean the air, to increase funding for education, to improve our roads, improve the infrastructure in our country, we're always told there's not enough money, there's other priorities,” said Deborah Burger, co-president of the National Nurses United. “And we actually have an answer, which is the financial transactions tax, or the Robin Hood tax.”
The bill was introduced by Democratic Minnesota Congressman Keith Ellison and now has 17 cosponsors—all Democrats, who hold 191 seats in the House of Representatives.
Other supporters of the tax include Bill Gates, Warren Buffett, George Soros and renowned economist Jeffery Sachs.
“The financial markets destabilized the world economy,” said Sachs. “They need to be regulated and taxed adequately, fairly, appropriately. The financial transactions tax is an important part of what should be an overall reform of the financial system. I'm delighted that Europe is moving ahead with the financial transactions tax. The United States needs to do the same.”
Professor Lynn Stout of Cornell University Law School, who spoke at the gathering, said that not taxing financial transactions is “crazy.”
“You know, we live in a country where things are taxed,” said Stout. “When you work hard, your wages are taxed. When you buy a car, the transaction is taxed. When you buy a house, the transaction is taxed. When you buy a tube of toothpaste or a pair of socks, the transaction is taxed. What is not taxed? Speculating in stocks, bonds, and derivatives.”
“That means we're essentially subsidizing speculation in financial instruments,” said Stout.
TranscriptCROWD: This is what democracy looks like! Show me what democracy looks like!
JESSICA DESVARIEUX, TRNN PRODUCER: Marching towards the capital of U.S. democracy, supporters of the financial transaction tax came to Capitol Hill on Wednesday to send a message.
DEBORAH BURGER, COPRESIDENT, NATIONAL NURSES UNITED: Whenever we go to our communities and the representatives that are elected in Congress to clean the air, to increase funding for education, to improve our roads, improve the infrastructure in our country, we're always told there's not enough money, there's other priorities. And we actually have an answer, which is the financial transactions tax, or the Robin Hood tax.
DESVARIEUX: The Robin Hood tax is a tax that would charge 0.5 percent on stock trades. That means that for every $100 of stock trades, there would be a $0.50 tax on bankers and brokers. The bill, the Inclusive Prosperity Act, was introduced by Democratic Minnesota Congressman Keith Ellison and now has 17 cosponsors, all Democrats. Representative Ellison said that the passage of the bill could generate $350 billion in new revenue each year.
KEITH ELLISON, U.S. REPRESENTATIVE (D-MN): America's not a poor country. America's a rich country. But the money is going to the tip top and not to the people. And so we have got to fight to reorder our economy. We've got to fight to make a fair economy. And the fight starts with this Inclusive Prosperity Act.
DESVARIEUX: The Real News spoke with Congresswoman Barbara Lee, who is one of the cosponsors of the bill, and aksed why only 17 out of the 191 House Democrats actually support the bill.
BARBARA LEE, U.S. REPRESENTATIVE (D-CA): Democrats and Republicans sooner or later are going to come to grips with the fact that this country, the American people, bailed Wall Street out. Now it's time for Wall Street to help people live the American dream. Three hundred and fifty billion dollar transaction tax--it's not a lot of money. But that's enough to really get our economy going and provide the jobs that people so desperately need. So we're going to build the support. And people here, as you see, are fired up and going to organize around the country. And believe you me, Democrats and Republicans sooner or later will come on board.
DESVARIEUX: But who is on board already? Notables in the business world like Bill Gates, Warren Buffett, and George Soros are in favor of the tax. And now 163 well-known economists and financial experts have drafted a letter of support that includes renowned economist Jeffrey Sachs, who said that the Robin Hood tax represents tax justice.
JEFFREY SACHS, DIRECTOR, EARTH INSTITUTE, COLUMBIA UNIV.: The financial markets destabilized the world economy. They need to be regulated and taxed adequately, fairly, appropriately. The financial transactions tax is an important part of what should be an overall reform of the financial system. I'm delighted that Europe is moving ahead with the financial transactions tax. The United States needs to do the same.DESVARIEUX: In Europe, 11 member countries of the E.U. have agreed to a transaction tax. Vice President of the European Parliament Anni Podimata says it was an uphill battle getting it passed. But she added that she' s confident that it can become a reality even in today's political climate.
ANNI PODIMATA, VICE PRESIDENT, EUROPEAN PARLIAMENT: I'm saying that it is politically unacceptable to have been increasing taxes on labor and pensioners and give in to lobbyists claiming that the industry will not be able to withstand this tiny tax.DESVARIEUX: But this tiny tax, critics argue, will hurt the economy. But professor of corporate and business law at Cornell University Lynn Stout says that history tells a different story.
PROF. LYNN STOUT, CORNELL UNIVERSITY LAW SCHOOL: Not only did we have a financial transaction tax in this country up until 1966, but in fact for other reasons, including brokers who imposed fix commissions of 8 percent on trades, we had much, much higher transactions costs on financial transactions in this country, and the market seemed to work just fin
You know, we live in a country where things are taxed. When you work hard, your wages are taxed. When you buy a car, the transaction is taxed. When you buy a house, the transaction is taxed. When you buy a tube of toothpaste or a pair of socks, the transaction is taxed. What is not taxed? Speculating in stocks, bonds, and derivatives.
UNIDENTIFIED: That ain't right.
STOUT: That's crazy. That means we're essentially subsidizing speculation in financial instruments.
DESVARIEUX: Subsidizing financial instruments is exactly what nurses of National Nurses United want to end. They made more than 90 visits to congressional offices to make their case.
And this one group from Massachusetts met with an aide from Democrat Stephen Lynch's office in order to solicit more support.
UNIDENTIFIED: There's a lot of things that are lacking with the people, the patients that I actually take care of: their ability to be able to take care of their children, their ability to be able to work. And I feel that this money would do great good.
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'How the Trans-Pacific Partnership Would Roll Back the Financial Regulations Needed to Avoid Another Crisis'
Below you see one of many anti-TPP justice groups shouting these few years how TPP will not allow what Obama with all those Clinton neo-liberals beside him state he wants to do------they pretend they want to act as Democrats with never intending to. Obama moved this Bush TPP as hard as Bush with Bill and Hillary working overseas to push developing nations into these trade agreements. TPP will set the stage for global Wall Street paying no taxes-----and it creates US International Economic Zones that are declared-----global corporate tax-free
SO-----WHO IS GOING TO PAY THE TAXES? INDIVIDUALS AND SMALL BUSINESSES IF THEY CAN SURVIVE.
In the DARK AGES where these global pols are trying to take the US----small business merchants were taxed so much they had to give a percentage of their inventory---farmers had to give a percentage of their harvest to the rich in taxation. That is to where Clinton/Obama Wall Street global corporate neo-liberals and Bush/Hopkins neo-cons are going with tax policy.
For those thinking this will only effect cities tied to International Economic Zones----once this is installed---there will be no protections all around the state----
HOW THE TRANS-PACIFIC PARTNERSHIP
WOULD IMPACT FINANCIAL REGULATIONS
How the Trans-Pacific Partnership Would Roll Back the Financial Regulations Needed to Avoid Another Crisis
The TPP would provide big banks with a backdoor means of rolling back efforts to re-regulate Wall Street in the wake of the global economic crisis.
The deal would require domestic law to conform to the now-rejected model of extreme deregulation that caused the crisis. The TPP would forbid countries from banning particularly risky financial products, such as the toxic derivatives that led to the $183 billion government bailout of AIG.
The TPP would threaten the use of "firewalls" - policies that are employed to stop the spread of risk between different types of financial institutions and products. While many in the United States have called for a reinstatement of the Glass-Steagall Act, that helped eliminate banking crises for four decades by prohibiting deposit-holding commercial banks from dealing in risky investments, the TPP would bar such reform. The TPP would ban capital controls, an essential policy tool to counter destabilizing flows of speculative money. Even the International Monetary Fund has recently endorsed capital controls as legitimate for mitigating or preventing financial crises.
The TPP would prohibit taxes on Wall Street speculation. That means that there would be no hope of passing proposals like the Robin Hood Tax, which would impose a tiny tax on Wall Street transactions to tamp down speculation-fueled volatility while generating hundreds of billions of dollars' worth of revenue for social, health, or environmental causes.
The TPP would empower financial firms to directly attack these government policies in foreign tribunals, and demand taxpayer compensation for policies they claim undermine their expected future profits.
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I included that TPP piece to show that in a Baltimore City as International Economic Zone-----we will be filled with global corporations and global banks----and none of them paying taxes.
This is why deregulating TAX UNIFORMITY is so dangerous for all US citizens. Right now we are seeing it directed against Baltimore homeowners as a development tool. People owning homes in communities that are slated to become global corporate campuses and global FOXCONN factories ----our surrounding communities are already victim of tax discrimination. The gentrified communities get tax breaks-----the communities not to be rebuilt see higher and higher taxation. We have justice organizations shouting against this----but NONE ARE GOING TO FEDERAL COURT TO STOP THIS WITH LOTS OF TAX LAW VIOLATIONS NEEDING TO BE ADDRESSED. This is the UNIFORMITY tax laws and the TAX DISCRIMINATION laws being violated.
Now, Baltimore Development spins this to race and class pretending this is aimed at poor and black communities----but the goal is global corporate campuses in those communities and would be done no matter who lived there. That's why I am shouting to those in Baltimore gentrified communities receiving tax breaks for one thing or another----
YOU WILL BE A TAX LOSER IF WE DO NOT STOP INTERNATIONAL ECONOMIC ZONE DEVELOPMENT.
Right now the property tax discrimination is the assessment of Baltimore house values which everyone knows is skewed. Mayors in the past assessed Baltimore houses too high just so the property taxes would be high----and then when everyone was angry---came back and changed some assessments.
NONE OF THIS IS LEGAL-----NONE OF THIS IS DESIRED-----AND IT ALL HAPPENS BECAUSE BALTIMORE IS STARVED OF TAX REVENUE IT SHOULD BE GETTING FROM THE CITY'S CORPORATIONS.
What is Tax Discrimination?
Ruth Mason
University of Virginia School of Law
Michael S. Knoll
University of Pennsylvania Law School; University of Pennsylvania - Real Estate Department
Yale Law Journal, Vol. 121, Pg. 1014, 2012
U of Penn, Inst for Law & Econ Research Paper No. 12-17
Abstract:
Prohibitions of tax discrimination have long appeared in constitutions, tax treaties, trade treaties and other sources, but despite their ubiquity little agreement exists as to how such provisions should be interpreted. This has led prior commentators to conclude that tax discrimination is an incoherent concept. In this Article, we argue that in common markets, like the European Union and the United States, the best interpretation of the nondiscrimination principle is that it requires what we call “competitive neutrality,” which prevents states from putting residents at a tax-induced competitive advantage or disadvantage relative to nonresidents in securing jobs. We show that, contrary to the prevailing view, maintaining a level playing field between resident and nonresident taxpayers requires neither tax rate harmonization nor equal taxation of residents and nonresidents. Our approach produces simple rules of thumb that provide states and courts with clear direction in writing tax laws and evaluating challenges to those laws.
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Lawsuit claims discrimination in real estate taxes
By Dana Rubinstein 12:30 p.m. | Feb. 26, 2014
Today, attorneys from a prominent boutique law firm filed a class action lawsuit challenging New York City's and New York State's real estate taxes, claiming they discriminate against black and Hispanic renters.
“As currently applied, New York City’s property tax classification system has...a disparate and adverse impact upon the City’s African-American and Hispanic residents, and denies such residents their statutorily and constitutionally protected rights to due process and equal protection,” reads the suit, filed by Newman Ferrara on behalf of African-American Bronx renter Ernest Robinson and Hispanic Queens renter Rosa Rodriguez, and the class of New Yorkers who rent apartments in buildings with 11 or more units.
The plaintiffs argue that under the Fair Housing Act, New York's real estate tax system illegally burdens the black and Hispanic New Yorkers who live in big rental buildings over predominantly white-owned condos and co-ops, and predominantly white- and Asian-owned one-, two-, and three-family houses.
The lawsuit addresses a long-simmering complaint about equity in the city's tax system. One real estate executive described the suit to me as "explosive."
In short, New York State law divides New York City residential real estate into two types: Class One (mostly one-, two- and three-family homes), and Class Two (all other residential properties).
Class Two then gets subdivided into into three categories: condos and coops, properties with 11 units or fewer, and properties with 11 units or more.
Homeowners (Class One) are disproportionately white and Asian.
And though those homeowners own property with more market value than apartment buildings, they pay less in taxes. ("For Fiscal Year 2013, Class One paid only 15.5% of the City’s Real Property Tax, while Class Two paid 37.0%.")
But that's only the half of it.
Within Class Two, condos and co-ops, which are typically located in neighborhoods with more white residents, "receive exceedingly generous treatment, a product of concerted lobbying on behalf of owners who sought similar treatment to that given to Class One property owners."
And so you end with situations like the city taxing an $88 million penthouse at 15 Central Park West as though it were only worth $4 million.
Who pays the taxes, then?
The suit argues its the city's black and Hispanic renters.
"[W]ithin Class Two the property tax burden falls disproportionately upon one type of residential property: rental property with 11 or more units," and black and Hispanic are much more likely to live in those buildings.
That higher tax burden gets passed down to them in the form of higher rent.
In fact, according to the suit, "approximately 30% of the monthly rent reflects the owner’s real estate tax obligation.”
The suit is demanding that the “City and State adopt policies, procedures, regulations and/or legislation that will equalize the tax burdens that are disproportionally borne by African-American and Hispanic residents of buildings with 11 or more units located within the City.”
"If this suit is successful it blows up the City’s property tax system and to rebuild it would be a monumental headache because you [are] either lowering taxes on class 2 (creating a huge budget shortfall) or raising taxes on Class 1 (creating a political headache)," the executive said.
Neither the city nor the state had any comment.
You can read the suit here.
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I love the graphics in this article----please check out the original article. We know the TIFs are being directed at downtown global corporate campus development and affluent housing. By extension this creates hardship for small businesses who pay property taxes. REIT corporate property taxes have always done this over a few decades----but now this tax disadvantage is soaring. In Baltimore that means a very neo-conservative Johns Hopkins and Baltimore Development get Baltimore City Hall and Baltimore Maryland Assembly pols to push for ever-lower property taxes for small business but what came out as all Baltimore small business owners know----was progressive posing----more selective tax breaks that missed the smaller businesses needing it. AGAIN, ALL OF THIS WAS ILLEGAL AND UNCONSTITUTIONAL.
Since US International Economic Zones are often in US cities where poor black communities are predominate-----much of this tax discrimination falls on black and Latino communities and businesses. As you see below-----it does as well kill funding of many public services including schools.
WE CAN REVERSE ALL OF THIS TAX DISCRIMINATION AND ILLEGAL WALL STREET FINANCIAL DEALS TIED TO BALTIMORE CITY TAXATION FOR DECADES-----
This will become as the saying goes-----AN INJUSTICE FOR ONE BECOMES INJUSTICE FOR ALL.
This comment below is not really correct------this state law that created a loophole for this use of TIF----violated the Federal Uniformity and Discrimination Tax laws. The solution is to remove all state laws that violate Federal laws.
'A little-understood provision in state law allows towns with TIFs to legally short their fellow Mainers. The provision was added to the 1977 TIF law in the 1980s and allows towns to keep increased real estate value sheltered from the state for up to 30 years when it’s in a TIF district.
Naomi Schalit
Peter Nielsen, Oakland town manager and Maine Municipal Association president
TIFs also allow cities and towns to hide new valuation from the county tax collector – meaning they won’t have to pay more taxes to the county for services such as jails'.
Tax law allows billions in business property taxes to be diverted from paying for local services and schools
By: Naomi Schalit, Senior reporter ©Maine Center for Public Interest Reporting | February 19, 2014
Print
Part one of a two-part series, "The TIF Game"
Put an addition on your house, and the town assessor will come around, increase the value of your house and your property taxes will go up.
Put up a new store or factory, and the same thing will happen.
The greater the value of your property, the more you pay into the town coffers. That’s the money the town and school districts use to plow the streets, operate the police department and pay the teachers.
That’s how property taxes work for everyone – well, almost everyone. One select group gets a better deal because it has something called a TIF. And only a few select businesses have them in most towns.
Get a TIF, and you, too, have to pay taxes on that new warehouse or factory – but the taxes don’t help pay for the schools, plowing and cops.
Instead, the property taxes paid by a company with a TIF might build a new road or sewer line to the business. Or the tax money sometimes is returned to the business to help its bottom line.
All this comes under a little-understood and highly-technical program called Tax Increment Financing (TIF) created by the state in 1977.
A Maine Center for Public Interest Reporting analysis determined that since 1985 – the year TIFs became popular – the program has earmarked almost $2.8 billion in property tax revenues for diversion over the lifetime of those TIFs, which can last up to 30 years. Of that amount, up to $1.2 billion is or will be rebated directly to business. (The actual dollars granted may be less because the state’s database includes revisions as well as the original TIFs, creating some double counting.)
Considering just the most-recent 10 years, communities across the state have diverted $518 million in property taxes via TIFs, according to Maine Revenue Service records.
Documents and interviews with experts reveal that TIFs have evolved from a good government attempt to redevelop blighted areas to a tax loophole businesses can use to cut favorable deals with communities desperate for development, as well as a tax scheme towns use to maximize state aid.
Orlando Delogu, emeritus law professor at the University of Maine, said the early TIFs performed an important function by encouraging redevelopment in Maine’s decaying mill towns and waterfronts.
“The debris of the past had to be cleared out of the way,” said Delogu.
Photo, The Forecaster
Law professor Orlando Delogu The Forecaster
“There’s nothing wrong with infrastructure improvements that enable you to attract an industry,” he said. “Those improvements benefit industry and society and the public will own it. It’s the sort of improvement that municipal government was created to put in place.”
But a second wave of TIFs granted in Maine allowed cities to give property tax payments directly back to developers, often with no specific public benefit in return. Almost $1.2 billion in property tax rebates have been granted under that part of the program, according to the Center’s analysis.
Those TIFs, Delogu said, amount to public money subsidizing private interests, with corporations “no longer having to bear the full cost of the capital investment they contemplate.”
A 2011 study on TIFs by the U.S. Public Interest Research Group stated that, “eagerness to bring in new development (or retain an existing business) … may lead governments to be overly generous in providing subsidies that are not justified by the level of public benefits delivered.” The Ford Foundation funded the report.
Those TIFs are characterized not by investments that benefit the public, but rather by private developers’ demands for cash — or they’ll take their business elsewhere or shut down, said Delogu.
“The thing is, if you deny them, they make the threat of going down the street” to another town, said Frenchville town manager John Davis, a former Millinocket city council member.
That’s just what happened in Hallowell, where in 2011 developer Peter Prescott asked the city to approve a TIF that would refund 100 percent of the property taxes for 20 years in exchange for rebuilding the Kennebec Ice Arena. The previous arena, also owned by Prescott, had collapsed under the weight of a snowy roof.
Prescott said his business needed the $1.2 million refund to help pay for the $4 million development.
City officials balked.
According to the Kennebec Journal, Prescott said he would consider relocating if he couldn’t get a deal in Hallowell. Prescott responded to two city councilors who objected to the deal, "Are you going to be a reasonable person, or are you going to get nothing?"
The city awarded a tax rebate of almost $500,000 over ten years to the arena, which re-opened in 2012. (It is now called the Bank of Maine Ice Vault.)
Similarly, when Bath Iron Works asked for a $6.36 million TIF last year to subsidize new construction at the shipyard, company officials said the subsidy was necessary to keep costs down and make the company more competitive and more likely to stay in Bath.
“Ships are awarded on the basis of lowest cost and BIW must do everything it can to be the low cost provider in order to win work that will secure our collective future in shipbuilding in the City of Bath,” stated an information sheet distributed by BIW.
The city council awarded the shipyard $3.7 million over 25 years.
TIF proponents cite examples of TIFs across the state that have helped create taxable property that ultimately benefits the public.
One of the state’s earliest TIFs happened in Auburn in 1984, when developers were considering several projects. But the area where the new businesses wanted to locate, near a highway interchange, had no modern sewer or water lines.
So the city’s economic development director, Roland Miller, got moving.
Photo Naomi Schalit
Auburn economic development director Roland Miller
His goal: Extend public sewer and water lines to the area.
His method: A TIF in which Auburn paid for the utilities extension with a long-term loan and then used the taxes paid by the developers on their new construction to pay off the bonds.
“We were able to get the public infrastructure extensions done that clearly had a strong market appeal,” and the targeted businesses located there, said Miller, who is still on the job.
But not all TIFs produce the results promised: In Millinocket, a TIF awarded to a paper company in 2001 and inherited by successive owners required the owners to keep 630 workers working at the mill in exchange for almost $2 million dollars in property tax reimbursement. Down to a skeleton staff in 2003, the owners went back to the city council and successfully petitioned to keep the TIF even though they were unable to meet its terms.
Maine’s business community maintains that TIFs are essential tools for making the state attractive to investors.
“When we have so many companies owned by out-of-state or out-of-the-country corporations, or we are competing with a sister plant in another state, quite often when it comes to investments, those incentives make a difference,” said Dana Connors, head of the Maine Chamber of Commerce.
TIFs, said Connors, have “proven to be an advantage.”
HOW TIFS WORK
Cities, towns, plantations and counties create and administer TIFs, while the state Department of Economic and Community Development (DECD) must approve each TIF.
Maine’s early TIFs worked like this:
• To entice a developer to an unattractive property, the town designates the property as a TIF district.
• Under the TIF agreement, which lasts for as long as 30 years, the town agrees to use the taxes paid on the improved property for infrastructure improvements. Bonds may be used for the upfront costs, and taxes pay off the bonds. The development’s property tax can also pay for economic development programs.
• The amount of state aid for schools and services that municipalities get is based in part on the dollar value of all the property in the town, as are a town’s county taxes. The higher the town’s valuation, the less state aid will be awarded and the more county taxes will be owed. But under a TIF, the new development’s increased property value is not counted in the town’s total valuation during the TIF period, so revenue sharing and county taxes don’t change.
A second wave of TIFs began in the 1990s, when so-called “credit enhancement agreements” began to be part of TIF deals.
A credit enhancement agreement means a portion or all of the taxes paid on new development are given back to the developer, who may use the money for improvements to the project or put it to some unspecified use. Essentially, taxpayers become a partner in the development. They get no equity in return, although they do get the tax payments once the TIF is over, in anywhere from five to 30 years.
From 1985-1994, $34 million in credit enhancements were granted to developers and businesses by Maine municipalities, according to state records. Credit enhancements took off in the 1990s and 2000s, when $1.15 billion were granted.
Contributed photo
Developer Kevin Mattson
While many credit enhancement agreements simply give taxes back to developers, some of them have been used to minimize the risk to taxpayers by requiring the developer to pay for improvements rather than have them paid for by a municipal bond. Once the developer makes those improvements, the town re-pays the developer out of the property taxes.
“Then you have the private company or individual bearing the risk rather than the taxpayer,” said developer Kevin Mattson, who has used TIFs to help finance a handful of projects across the state.
Credit enhancement agreements can effectively transform taxpayers into bankers.
The credit enhancement is “gap financing,” said Daniel Stevenson, Biddeford’s economic development director who was in charge of state tax incentive programs between 2006-2008. It’s “money going back to a business owner or developer to offset costs to actually make the deal happen.”
In 1997, the city of Bath voted to give back $81 million in a TIF to Bath Iron Works for its shipyard expansion, which the Portland Press Herald wrote “would help pay off loans needed for the expansion.”
In 2011, Portland agreed to return $31.5 million in a TIF to a project at Thompson’s Point that included a concert hall and hotel and office space. The Thompson’s Point developers told city officials that the project could not go ahead without the tax rebate because the site posed construction problems requiring expensive solutions.
While some credit enhancement tax credits are conditional, tying the reimbursements to investment levels, job salaries or site improvements, some, like the BIW and Thompson’s Point deals, are straightforward subsidies to the developer (BIW used a small percentage of the TIF to do infrastructure improvements). That leads Delogu to charge that the public is being forced to “underwrite the capital investment costs of private sector enterprises.”
“The credit that is being enhanced is the credit of the applicant,” Delogu said.
Mattson, the developer, also has concerns about the liberal use of credit enhancement agreements.
“In the old days, TIFs used to be very straightforward,” Mattson said. The idea behind them was: “We need to put infrastructure in for this project, can we get the taxes that this project generates to pay for them?”
But the current version of TIFs-with-credit-enhancements, said Mattson, “are a great tool that could be easily abused in a community.”
Town officials may be under pressure, for example, to give in to a company’s demands for tax money if the company is the largest employer in that town and is threatening to close down or move away.
“When you’re dealing under duress with the TIF, that’s a problem,” said Mattson.
“There are TIFs that pay money back that are unrestricted. Wow."
But, giving that money back to developers and businesses, said Biddeford economic development official Stevenson, is one of the few ways Maine’s municipalities can attract economic development.
“In order for Maine to be competitive with other states, we have a very small toolbox in order to leverage enough tools together to make a deal happen,” he said. “In the city of Biddeford, we can barely pull these projects together…. Access to capital is more and more difficult.”
That, however, overlooks the tools the state has to help cities attract businesses, from business equipment tax exemptions to sales tax exemptions to rebated income taxes and other programs.
Legislators are considering reducing state business tax subsidies by $40 million this year, referring to such programs as the state’s “secret budget” that costs half a billion dollars a year. And that number does not take into account the TIF program.
Tomorrow, part two: How TIFs can increase – or decrease – a community’s state aid
The Maine Center for Public Interest Reporting is a nonpartisan, non-profit news service based in Hallowell. Email: mainecenter@gmail.com. Web: pinetreewatchdog.org.
I want to look closer to state and local tax policies that have ignored this as well these few decades. We saw the corporate TIFs====the Enterprise Zone tax breaks that of course were sent to global corporations. Citizens of Maryland need to see the same uniformity tax law stands in our Constitution. Maryland Assembly tries to loophole this to death by claiming the right to divide according to sub-sections of real estate or business BUT THAT IS NOT WHAT TAX UNIFORMITY LAW represents.
CONSTITUTION OF MARYLAND
ADOPTED BY THE CONVENTION
DECLARATION OF RIGHTS.
That the People of this State have the sole and exclusive right of regulating the internal government and police thereof, as a free, sovereign and independent State.
Art. 15. That the levying of taxes by the poll is grievous and oppressive, and ought to be prohibited; that paupers ought not to be assessed for the support of the government; that the General Assembly shall, by uniform rules,
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I love to hear Carl Stokes, a candidate for Mayor of Baltimore state ----WHERE DOES CINDY WALSH GET THOSE NUMBERS?------ when I state over and over the Baltimore City school building bond will cost taxpayers $1 billion over 30 years in Wall Street fees----and that is without all the fraud and manipulation of interest rates. Carl and Baltimore City Hall knew this bond deal was bad for our schools and the city-----yet they pretend they don't understand this. Baltimore Maryland Assembly pols pushed this as well---
This issue ties to Wall Street and Federal Tax Uniformity. Wall Street famously shouted as US citizens called for taxing Wall Street to recover trillions of dollars in fraud------YOU CANNOT TAX ONLY WALL STREET BANKS BECAUSE OF THE TAX UNIFORMITY LAW----ALL BUSINESSES WOULD NEED TO BE TAXED! Oh, so Wall Street recognizes Federal Tax Uniformity when it is directed at them.
Tying Baltimore taxpayers to all of this bond debt will have Baltimore citizens with growing tax rates and as those tax rates rise------we already see Baltimore City Hall carving out all kinds of exceptions as to whose taxes will rise. As I stated yesterday-----if you are a winner today----you will be a big loser if this continues.
I posted this article from another state-----this Loudon County is Virginia I think-----Baltimore media said the same thing when this Baltimore School building bond was announced----$1 billion in taxpayer fees to get $1 billion bond. This is public malfeasance AND it violates tax uniformity laws in staging who will end paying all these taxes.
This is one example of what a Mayor of Baltimore would do to bring revenue back to city coffers----we never needed that bond. I heard Baltimore Development say-----spend this money fast meaning the repairs to the few schools receiving this funding----because it was all illegal.
Vote no on school bond
Friday, Oct. 29
Ten days before the election, Loudoun County Public Schools management mailed a flyer to all the postal patrons in the county at taxpayer expense. The flyer tells one side of the story – their side – which supports the $27.82 million bond sale to help build a new elementary school.
The taxpayer side of this discussion has not been presented. Loudoun County has incurred a debt through the beginning of fiscal 2012 of $1.2 billion – $4,000 of debt for each of the 300,000 residents in Loudoun County. The annual cost to service the interest on this debt is $160 million. That’s $750 to $1,000 per year of additional tax for each taxpayer just to pay the interest on this debt.
Rest assured, things will get worse. The current Loudoun County fiscal plan envisions growing this debt to 1.4 billion by fiscal 2016, with an increase in the service costs to $200 million per year. Loudoun taxpayers will pay more than $1 billion in interest through 2015.
Much like the federal government, Loudoun County government is in debt beyond its means to repay. Loudoun is living beyond its means. The fiscal dishonesty exhibited by the Loudoun County Public Schools management in advocating the bond issue should be a concern to every taxpayer. To bring the subject up 10 days before elections ensures that no discussion of both sides of the issue will be possible. We have been there and seen that before. We all want the best education system for the students in Loudoun County. This is the canard the LCPS management advocates in telling one side of the bond referendum story.
Loudoun taxpayers can no longer afford empire-building on the part of the school system. LCPS needs to learn to live within their means like the rest of us
The day of big government may be over, but only because the day of gigantic government is coming. Someone has to urge voters to vote no on the proposed bond referendum. Unfortunately, the apparently intentional timing by LCPS makes it difficult to spread this message.
Joseph Robert Mayersak
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'Video: Don’t Let Property Tax Plan Derail PA Schools'
I wish this article was FB friendly but please take time to go to this article and watch the video-------here you see a PA school system understanding that tying public school systems to such debt-----and it will be tied to all Baltimore taxes including PROPERTY TAXES as this article states. Why was there absolutely NO PUBLIC DISCUSSION ON THIS ISSUE IN BALTIMORE? Well, my Citizens Oversight shouted to all justice and education organizations and pols exactly this BEFORE this bond issue was passed. Again, this will become an TAX UNIFORMITY ISSUE as Baltimore already ignores this uniformity in property taxes. What is most important is this------the goal of deregulating this UNIFORMITY OF TAXATION is tied to the power of global corporations controlling how citizens are taxed in the future--US International Economic Zones like Baltimore will be ruled by this global corporate tribunal writing all public policy with our Congressional pols installing it.
Now think-----where does a city get city funding for public schools? Partially from property taxes. When our public K-12 is currently being privatized to corporate charters-----are we sending our property tax to PUBLIC SCHOOLS? Of course not----WE THE PEOPLE will be supporting global corporate campus schools. Remember, this school building bond in Baltimore does the same as this article from PA states-------part of all Baltimore City school funding will go to service this Wall Street deal that was not needed in the first place. Baltimore had plenty of revenue to rebuild all public schools----this bond was attached to make sure these public schools defaulted in the bond market collapse to those Wall Street investors tied to those bonds. THAT IS FOR WHOM BALTIMORE CITY COUNCIL, MAYOR, AND BALTIMORE MARYLAND ASSEMBLY WORK WHEN THEY PUSH THESE DEALS
I do not necessarily agree with all this PA organization pushes in policy---I simply see where they recognize the same problems. As Maryland reduces/eliminates its state funding of public schools as Mike Miller was heard saying will happen-----we see taxation at the Baltimore level especially for public schools becoming unbearable. What is the solution says Baltimore Development Corporation whose goal is to send our public schools to corporations? PUBLIC PRIVATE PARTNERSHIPS OF K-12 AS CORPORATE SCHOOLS.
Video: Don’t Let Property Tax Plan Derail PA SchoolsBy Chris Lilienthal, Third and State
The future of Pennsylvania schools – and the quality of education every child receives – is at stake in a property tax proposal in Harrisburg.
The plan to swap property taxes for higher state levies will drain billions from Pennsylvania classrooms within a few years. Over time, it increases funding inequities across districts and makes it harder for future graduates to compete in a 21st century job market.
There is a better way. Watch our new whiteboard video to see how we can strengthen our schools, make funding more equitable, and address property tax concerns.
Good schools are vital to every community and its economy. Yet the real problem, as our video explains, is that Pennsylvania trails most other states when it comes to state funding for public schools. By investing more state dollars in education, Pennsylvania can improve its schools and ease the pressure on property taxes.
In other words, we can have good schools AND help people having trouble paying their property taxes.
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I want to out some progressive posing on this issue of Robin Hood tax. The grassroots like the Nurses Union really want this and have good intentions. This tax needs to be far higher---in Europe I think they are going with 1-2% financial transaction tax. So this is pennies on the dollar in what we need to recover trillions of dollars in Wall Street fraud. Wall Street responds by saying----YOU CANNOT TARGET ONLY WALL STREET BANKS WITH A TAX-----Tax Uniformity they say. This is the progressive posing by Congressional pols in this video and the 1% shown supporting this---Gates, Soros, and Sachs-----and REAL NEWS and all national media allow this progressive posing----TRANS PACIFIC TRADE PACT INCLUDES WRITTEN POLICIES THAT WILL NOT ALLOW GLOBAL BANKS TO BE TAXED-----THIS IS COMMON KNOWLEDGE. So, when you have Congress pushing this bill which is very needed-----media and pols know they are already FAST TRACKING TPP which will negate all of this along with the Frank Dodd Wall Street reforms. Clinton neo-liberals and Obama knew TPP included this the entire time they were writing Wall Street reform----knowing none of it would be enacted once International Economic Zone and Trans Pacific Trade Pact was enacted.
After the Great Crash that brought the Depression FDR and Congress passed huge taxation on rich and corporations to recover all that fraud-----this is how today's Congress reacts to just a fraction of a tax on Wall Street because----today all Democrats are Clinton/Obama neo-liberals.
Support for Robin Hood Tax Growing, but Majority of Democrats Not On Board
Robin Hood tax supporters National Nurses United, economist Jeffrey Sachs, and European Parliament VP tell Congress to support "no brainer" tax on Wall Street - October 31, 2013
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Supporters of a tax on Wall Street financial transactions gathered on Capitol Hall last Wednesday to put pressure on Congress for its adoption.
The tax, included in the Inclusive Prosperity Act, would charge 0.5 percent on every stock trade, generating an estimated $350 billion in new revenue each year.
“Whenever we go to our communities and the representatives that are elected in Congress to clean the air, to increase funding for education, to improve our roads, improve the infrastructure in our country, we're always told there's not enough money, there's other priorities,” said Deborah Burger, co-president of the National Nurses United. “And we actually have an answer, which is the financial transactions tax, or the Robin Hood tax.”
The bill was introduced by Democratic Minnesota Congressman Keith Ellison and now has 17 cosponsors—all Democrats, who hold 191 seats in the House of Representatives.
Other supporters of the tax include Bill Gates, Warren Buffett, George Soros and renowned economist Jeffery Sachs.
“The financial markets destabilized the world economy,” said Sachs. “They need to be regulated and taxed adequately, fairly, appropriately. The financial transactions tax is an important part of what should be an overall reform of the financial system. I'm delighted that Europe is moving ahead with the financial transactions tax. The United States needs to do the same.”
Professor Lynn Stout of Cornell University Law School, who spoke at the gathering, said that not taxing financial transactions is “crazy.”
“You know, we live in a country where things are taxed,” said Stout. “When you work hard, your wages are taxed. When you buy a car, the transaction is taxed. When you buy a house, the transaction is taxed. When you buy a tube of toothpaste or a pair of socks, the transaction is taxed. What is not taxed? Speculating in stocks, bonds, and derivatives.”
“That means we're essentially subsidizing speculation in financial instruments,” said Stout.
TranscriptCROWD: This is what democracy looks like! Show me what democracy looks like!
JESSICA DESVARIEUX, TRNN PRODUCER: Marching towards the capital of U.S. democracy, supporters of the financial transaction tax came to Capitol Hill on Wednesday to send a message.
DEBORAH BURGER, COPRESIDENT, NATIONAL NURSES UNITED: Whenever we go to our communities and the representatives that are elected in Congress to clean the air, to increase funding for education, to improve our roads, improve the infrastructure in our country, we're always told there's not enough money, there's other priorities. And we actually have an answer, which is the financial transactions tax, or the Robin Hood tax.
DESVARIEUX: The Robin Hood tax is a tax that would charge 0.5 percent on stock trades. That means that for every $100 of stock trades, there would be a $0.50 tax on bankers and brokers. The bill, the Inclusive Prosperity Act, was introduced by Democratic Minnesota Congressman Keith Ellison and now has 17 cosponsors, all Democrats. Representative Ellison said that the passage of the bill could generate $350 billion in new revenue each year.
KEITH ELLISON, U.S. REPRESENTATIVE (D-MN): America's not a poor country. America's a rich country. But the money is going to the tip top and not to the people. And so we have got to fight to reorder our economy. We've got to fight to make a fair economy. And the fight starts with this Inclusive Prosperity Act.
DESVARIEUX: The Real News spoke with Congresswoman Barbara Lee, who is one of the cosponsors of the bill, and aksed why only 17 out of the 191 House Democrats actually support the bill.
BARBARA LEE, U.S. REPRESENTATIVE (D-CA): Democrats and Republicans sooner or later are going to come to grips with the fact that this country, the American people, bailed Wall Street out. Now it's time for Wall Street to help people live the American dream. Three hundred and fifty billion dollar transaction tax--it's not a lot of money. But that's enough to really get our economy going and provide the jobs that people so desperately need. So we're going to build the support. And people here, as you see, are fired up and going to organize around the country. And believe you me, Democrats and Republicans sooner or later will come on board.
DESVARIEUX: But who is on board already? Notables in the business world like Bill Gates, Warren Buffett, and George Soros are in favor of the tax. And now 163 well-known economists and financial experts have drafted a letter of support that includes renowned economist Jeffrey Sachs, who said that the Robin Hood tax represents tax justice.
JEFFREY SACHS, DIRECTOR, EARTH INSTITUTE, COLUMBIA UNIV.: The financial markets destabilized the world economy. They need to be regulated and taxed adequately, fairly, appropriately. The financial transactions tax is an important part of what should be an overall reform of the financial system. I'm delighted that Europe is moving ahead with the financial transactions tax. The United States needs to do the same.DESVARIEUX: In Europe, 11 member countries of the E.U. have agreed to a transaction tax. Vice President of the European Parliament Anni Podimata says it was an uphill battle getting it passed. But she added that she' s confident that it can become a reality even in today's political climate.
ANNI PODIMATA, VICE PRESIDENT, EUROPEAN PARLIAMENT: I'm saying that it is politically unacceptable to have been increasing taxes on labor and pensioners and give in to lobbyists claiming that the industry will not be able to withstand this tiny tax.DESVARIEUX: But this tiny tax, critics argue, will hurt the economy. But professor of corporate and business law at Cornell University Lynn Stout says that history tells a different story.
PROF. LYNN STOUT, CORNELL UNIVERSITY LAW SCHOOL: Not only did we have a financial transaction tax in this country up until 1966, but in fact for other reasons, including brokers who imposed fix commissions of 8 percent on trades, we had much, much higher transactions costs on financial transactions in this country, and the market seemed to work just fin
You know, we live in a country where things are taxed. When you work hard, your wages are taxed. When you buy a car, the transaction is taxed. When you buy a house, the transaction is taxed. When you buy a tube of toothpaste or a pair of socks, the transaction is taxed. What is not taxed? Speculating in stocks, bonds, and derivatives.
UNIDENTIFIED: That ain't right.
STOUT: That's crazy. That means we're essentially subsidizing speculation in financial instruments.
DESVARIEUX: Subsidizing financial instruments is exactly what nurses of National Nurses United want to end. They made more than 90 visits to congressional offices to make their case.
And this one group from Massachusetts met with an aide from Democrat Stephen Lynch's office in order to solicit more support.
UNIDENTIFIED: There's a lot of things that are lacking with the people, the patients that I actually take care of: their ability to be able to take care of their children, their ability to be able to work. And I feel that this money would do great good.
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'How the Trans-Pacific Partnership Would Roll Back the Financial Regulations Needed to Avoid Another Crisis'
Below you see one of many anti-TPP justice groups shouting these few years how TPP will not allow what Obama with all those Clinton neo-liberals beside him state he wants to do------they pretend they want to act as Democrats with never intending to. Obama moved this Bush TPP as hard as Bush with Bill and Hillary working overseas to push developing nations into these trade agreements. TPP will set the stage for global Wall Street paying no taxes-----and it creates US International Economic Zones that are declared-----global corporate tax-free
SO-----WHO IS GOING TO PAY THE TAXES? INDIVIDUALS AND SMALL BUSINESSES IF THEY CAN SURVIVE.
In the DARK AGES where these global pols are trying to take the US----small business merchants were taxed so much they had to give a percentage of their inventory---farmers had to give a percentage of their harvest to the rich in taxation. That is to where Clinton/Obama Wall Street global corporate neo-liberals and Bush/Hopkins neo-cons are going with tax policy.
For those thinking this will only effect cities tied to International Economic Zones----once this is installed---there will be no protections all around the state----
HOW THE TRANS-PACIFIC PARTNERSHIP
WOULD IMPACT FINANCIAL REGULATIONS
How the Trans-Pacific Partnership Would Roll Back the Financial Regulations Needed to Avoid Another Crisis
The TPP would provide big banks with a backdoor means of rolling back efforts to re-regulate Wall Street in the wake of the global economic crisis.
The deal would require domestic law to conform to the now-rejected model of extreme deregulation that caused the crisis. The TPP would forbid countries from banning particularly risky financial products, such as the toxic derivatives that led to the $183 billion government bailout of AIG.
The TPP would threaten the use of "firewalls" - policies that are employed to stop the spread of risk between different types of financial institutions and products. While many in the United States have called for a reinstatement of the Glass-Steagall Act, that helped eliminate banking crises for four decades by prohibiting deposit-holding commercial banks from dealing in risky investments, the TPP would bar such reform. The TPP would ban capital controls, an essential policy tool to counter destabilizing flows of speculative money. Even the International Monetary Fund has recently endorsed capital controls as legitimate for mitigating or preventing financial crises.
The TPP would prohibit taxes on Wall Street speculation. That means that there would be no hope of passing proposals like the Robin Hood Tax, which would impose a tiny tax on Wall Street transactions to tamp down speculation-fueled volatility while generating hundreds of billions of dollars' worth of revenue for social, health, or environmental causes.
The TPP would empower financial firms to directly attack these government policies in foreign tribunals, and demand taxpayer compensation for policies they claim undermine their expected future profits.
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I included that TPP piece to show that in a Baltimore City as International Economic Zone-----we will be filled with global corporations and global banks----and none of them paying taxes.
This is why deregulating TAX UNIFORMITY is so dangerous for all US citizens. Right now we are seeing it directed against Baltimore homeowners as a development tool. People owning homes in communities that are slated to become global corporate campuses and global FOXCONN factories ----our surrounding communities are already victim of tax discrimination. The gentrified communities get tax breaks-----the communities not to be rebuilt see higher and higher taxation. We have justice organizations shouting against this----but NONE ARE GOING TO FEDERAL COURT TO STOP THIS WITH LOTS OF TAX LAW VIOLATIONS NEEDING TO BE ADDRESSED. This is the UNIFORMITY tax laws and the TAX DISCRIMINATION laws being violated.
Now, Baltimore Development spins this to race and class pretending this is aimed at poor and black communities----but the goal is global corporate campuses in those communities and would be done no matter who lived there. That's why I am shouting to those in Baltimore gentrified communities receiving tax breaks for one thing or another----
YOU WILL BE A TAX LOSER IF WE DO NOT STOP INTERNATIONAL ECONOMIC ZONE DEVELOPMENT.
Right now the property tax discrimination is the assessment of Baltimore house values which everyone knows is skewed. Mayors in the past assessed Baltimore houses too high just so the property taxes would be high----and then when everyone was angry---came back and changed some assessments.
NONE OF THIS IS LEGAL-----NONE OF THIS IS DESIRED-----AND IT ALL HAPPENS BECAUSE BALTIMORE IS STARVED OF TAX REVENUE IT SHOULD BE GETTING FROM THE CITY'S CORPORATIONS.
What is Tax Discrimination?
Ruth Mason
University of Virginia School of Law
Michael S. Knoll
University of Pennsylvania Law School; University of Pennsylvania - Real Estate Department
Yale Law Journal, Vol. 121, Pg. 1014, 2012
U of Penn, Inst for Law & Econ Research Paper No. 12-17
Abstract:
Prohibitions of tax discrimination have long appeared in constitutions, tax treaties, trade treaties and other sources, but despite their ubiquity little agreement exists as to how such provisions should be interpreted. This has led prior commentators to conclude that tax discrimination is an incoherent concept. In this Article, we argue that in common markets, like the European Union and the United States, the best interpretation of the nondiscrimination principle is that it requires what we call “competitive neutrality,” which prevents states from putting residents at a tax-induced competitive advantage or disadvantage relative to nonresidents in securing jobs. We show that, contrary to the prevailing view, maintaining a level playing field between resident and nonresident taxpayers requires neither tax rate harmonization nor equal taxation of residents and nonresidents. Our approach produces simple rules of thumb that provide states and courts with clear direction in writing tax laws and evaluating challenges to those laws.
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Lawsuit claims discrimination in real estate taxes
By Dana Rubinstein 12:30 p.m. | Feb. 26, 2014
Today, attorneys from a prominent boutique law firm filed a class action lawsuit challenging New York City's and New York State's real estate taxes, claiming they discriminate against black and Hispanic renters.
“As currently applied, New York City’s property tax classification system has...a disparate and adverse impact upon the City’s African-American and Hispanic residents, and denies such residents their statutorily and constitutionally protected rights to due process and equal protection,” reads the suit, filed by Newman Ferrara on behalf of African-American Bronx renter Ernest Robinson and Hispanic Queens renter Rosa Rodriguez, and the class of New Yorkers who rent apartments in buildings with 11 or more units.
The plaintiffs argue that under the Fair Housing Act, New York's real estate tax system illegally burdens the black and Hispanic New Yorkers who live in big rental buildings over predominantly white-owned condos and co-ops, and predominantly white- and Asian-owned one-, two-, and three-family houses.
The lawsuit addresses a long-simmering complaint about equity in the city's tax system. One real estate executive described the suit to me as "explosive."
In short, New York State law divides New York City residential real estate into two types: Class One (mostly one-, two- and three-family homes), and Class Two (all other residential properties).
Class Two then gets subdivided into into three categories: condos and coops, properties with 11 units or fewer, and properties with 11 units or more.
Homeowners (Class One) are disproportionately white and Asian.
And though those homeowners own property with more market value than apartment buildings, they pay less in taxes. ("For Fiscal Year 2013, Class One paid only 15.5% of the City’s Real Property Tax, while Class Two paid 37.0%.")
But that's only the half of it.
Within Class Two, condos and co-ops, which are typically located in neighborhoods with more white residents, "receive exceedingly generous treatment, a product of concerted lobbying on behalf of owners who sought similar treatment to that given to Class One property owners."
And so you end with situations like the city taxing an $88 million penthouse at 15 Central Park West as though it were only worth $4 million.
Who pays the taxes, then?
The suit argues its the city's black and Hispanic renters.
"[W]ithin Class Two the property tax burden falls disproportionately upon one type of residential property: rental property with 11 or more units," and black and Hispanic are much more likely to live in those buildings.
That higher tax burden gets passed down to them in the form of higher rent.
In fact, according to the suit, "approximately 30% of the monthly rent reflects the owner’s real estate tax obligation.”
The suit is demanding that the “City and State adopt policies, procedures, regulations and/or legislation that will equalize the tax burdens that are disproportionally borne by African-American and Hispanic residents of buildings with 11 or more units located within the City.”
"If this suit is successful it blows up the City’s property tax system and to rebuild it would be a monumental headache because you [are] either lowering taxes on class 2 (creating a huge budget shortfall) or raising taxes on Class 1 (creating a political headache)," the executive said.
Neither the city nor the state had any comment.
You can read the suit here.
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I love the graphics in this article----please check out the original article. We know the TIFs are being directed at downtown global corporate campus development and affluent housing. By extension this creates hardship for small businesses who pay property taxes. REIT corporate property taxes have always done this over a few decades----but now this tax disadvantage is soaring. In Baltimore that means a very neo-conservative Johns Hopkins and Baltimore Development get Baltimore City Hall and Baltimore Maryland Assembly pols to push for ever-lower property taxes for small business but what came out as all Baltimore small business owners know----was progressive posing----more selective tax breaks that missed the smaller businesses needing it. AGAIN, ALL OF THIS WAS ILLEGAL AND UNCONSTITUTIONAL.
Since US International Economic Zones are often in US cities where poor black communities are predominate-----much of this tax discrimination falls on black and Latino communities and businesses. As you see below-----it does as well kill funding of many public services including schools.
WE CAN REVERSE ALL OF THIS TAX DISCRIMINATION AND ILLEGAL WALL STREET FINANCIAL DEALS TIED TO BALTIMORE CITY TAXATION FOR DECADES-----
This will become as the saying goes-----AN INJUSTICE FOR ONE BECOMES INJUSTICE FOR ALL.
This comment below is not really correct------this state law that created a loophole for this use of TIF----violated the Federal Uniformity and Discrimination Tax laws. The solution is to remove all state laws that violate Federal laws.
'A little-understood provision in state law allows towns with TIFs to legally short their fellow Mainers. The provision was added to the 1977 TIF law in the 1980s and allows towns to keep increased real estate value sheltered from the state for up to 30 years when it’s in a TIF district.
Naomi Schalit
Peter Nielsen, Oakland town manager and Maine Municipal Association president
TIFs also allow cities and towns to hide new valuation from the county tax collector – meaning they won’t have to pay more taxes to the county for services such as jails'.
Tax law allows billions in business property taxes to be diverted from paying for local services and schools
By: Naomi Schalit, Senior reporter ©Maine Center for Public Interest Reporting | February 19, 2014
Part one of a two-part series, "The TIF Game"
Put an addition on your house, and the town assessor will come around, increase the value of your house and your property taxes will go up.
Put up a new store or factory, and the same thing will happen.
The greater the value of your property, the more you pay into the town coffers. That’s the money the town and school districts use to plow the streets, operate the police department and pay the teachers.
That’s how property taxes work for everyone – well, almost everyone. One select group gets a better deal because it has something called a TIF. And only a few select businesses have them in most towns.
Get a TIF, and you, too, have to pay taxes on that new warehouse or factory – but the taxes don’t help pay for the schools, plowing and cops.
Instead, the property taxes paid by a company with a TIF might build a new road or sewer line to the business. Or the tax money sometimes is returned to the business to help its bottom line.
All this comes under a little-understood and highly-technical program called Tax Increment Financing (TIF) created by the state in 1977.
A Maine Center for Public Interest Reporting analysis determined that since 1985 – the year TIFs became popular – the program has earmarked almost $2.8 billion in property tax revenues for diversion over the lifetime of those TIFs, which can last up to 30 years. Of that amount, up to $1.2 billion is or will be rebated directly to business. (The actual dollars granted may be less because the state’s database includes revisions as well as the original TIFs, creating some double counting.)
Considering just the most-recent 10 years, communities across the state have diverted $518 million in property taxes via TIFs, according to Maine Revenue Service records.
Documents and interviews with experts reveal that TIFs have evolved from a good government attempt to redevelop blighted areas to a tax loophole businesses can use to cut favorable deals with communities desperate for development, as well as a tax scheme towns use to maximize state aid.
Orlando Delogu, emeritus law professor at the University of Maine, said the early TIFs performed an important function by encouraging redevelopment in Maine’s decaying mill towns and waterfronts.
“The debris of the past had to be cleared out of the way,” said Delogu.
Photo, The Forecaster
Law professor Orlando Delogu The Forecaster
“There’s nothing wrong with infrastructure improvements that enable you to attract an industry,” he said. “Those improvements benefit industry and society and the public will own it. It’s the sort of improvement that municipal government was created to put in place.”
But a second wave of TIFs granted in Maine allowed cities to give property tax payments directly back to developers, often with no specific public benefit in return. Almost $1.2 billion in property tax rebates have been granted under that part of the program, according to the Center’s analysis.
Those TIFs, Delogu said, amount to public money subsidizing private interests, with corporations “no longer having to bear the full cost of the capital investment they contemplate.”
A 2011 study on TIFs by the U.S. Public Interest Research Group stated that, “eagerness to bring in new development (or retain an existing business) … may lead governments to be overly generous in providing subsidies that are not justified by the level of public benefits delivered.” The Ford Foundation funded the report.
Those TIFs are characterized not by investments that benefit the public, but rather by private developers’ demands for cash — or they’ll take their business elsewhere or shut down, said Delogu.
“The thing is, if you deny them, they make the threat of going down the street” to another town, said Frenchville town manager John Davis, a former Millinocket city council member.
That’s just what happened in Hallowell, where in 2011 developer Peter Prescott asked the city to approve a TIF that would refund 100 percent of the property taxes for 20 years in exchange for rebuilding the Kennebec Ice Arena. The previous arena, also owned by Prescott, had collapsed under the weight of a snowy roof.
Prescott said his business needed the $1.2 million refund to help pay for the $4 million development.
City officials balked.
According to the Kennebec Journal, Prescott said he would consider relocating if he couldn’t get a deal in Hallowell. Prescott responded to two city councilors who objected to the deal, "Are you going to be a reasonable person, or are you going to get nothing?"
The city awarded a tax rebate of almost $500,000 over ten years to the arena, which re-opened in 2012. (It is now called the Bank of Maine Ice Vault.)
Similarly, when Bath Iron Works asked for a $6.36 million TIF last year to subsidize new construction at the shipyard, company officials said the subsidy was necessary to keep costs down and make the company more competitive and more likely to stay in Bath.
“Ships are awarded on the basis of lowest cost and BIW must do everything it can to be the low cost provider in order to win work that will secure our collective future in shipbuilding in the City of Bath,” stated an information sheet distributed by BIW.
The city council awarded the shipyard $3.7 million over 25 years.
TIF proponents cite examples of TIFs across the state that have helped create taxable property that ultimately benefits the public.
One of the state’s earliest TIFs happened in Auburn in 1984, when developers were considering several projects. But the area where the new businesses wanted to locate, near a highway interchange, had no modern sewer or water lines.
So the city’s economic development director, Roland Miller, got moving.
Photo Naomi Schalit
Auburn economic development director Roland Miller
His goal: Extend public sewer and water lines to the area.
His method: A TIF in which Auburn paid for the utilities extension with a long-term loan and then used the taxes paid by the developers on their new construction to pay off the bonds.
“We were able to get the public infrastructure extensions done that clearly had a strong market appeal,” and the targeted businesses located there, said Miller, who is still on the job.
But not all TIFs produce the results promised: In Millinocket, a TIF awarded to a paper company in 2001 and inherited by successive owners required the owners to keep 630 workers working at the mill in exchange for almost $2 million dollars in property tax reimbursement. Down to a skeleton staff in 2003, the owners went back to the city council and successfully petitioned to keep the TIF even though they were unable to meet its terms.
Maine’s business community maintains that TIFs are essential tools for making the state attractive to investors.
“When we have so many companies owned by out-of-state or out-of-the-country corporations, or we are competing with a sister plant in another state, quite often when it comes to investments, those incentives make a difference,” said Dana Connors, head of the Maine Chamber of Commerce.
TIFs, said Connors, have “proven to be an advantage.”
HOW TIFS WORK
Cities, towns, plantations and counties create and administer TIFs, while the state Department of Economic and Community Development (DECD) must approve each TIF.
Maine’s early TIFs worked like this:
• To entice a developer to an unattractive property, the town designates the property as a TIF district.
• Under the TIF agreement, which lasts for as long as 30 years, the town agrees to use the taxes paid on the improved property for infrastructure improvements. Bonds may be used for the upfront costs, and taxes pay off the bonds. The development’s property tax can also pay for economic development programs.
• The amount of state aid for schools and services that municipalities get is based in part on the dollar value of all the property in the town, as are a town’s county taxes. The higher the town’s valuation, the less state aid will be awarded and the more county taxes will be owed. But under a TIF, the new development’s increased property value is not counted in the town’s total valuation during the TIF period, so revenue sharing and county taxes don’t change.
A second wave of TIFs began in the 1990s, when so-called “credit enhancement agreements” began to be part of TIF deals.
A credit enhancement agreement means a portion or all of the taxes paid on new development are given back to the developer, who may use the money for improvements to the project or put it to some unspecified use. Essentially, taxpayers become a partner in the development. They get no equity in return, although they do get the tax payments once the TIF is over, in anywhere from five to 30 years.
From 1985-1994, $34 million in credit enhancements were granted to developers and businesses by Maine municipalities, according to state records. Credit enhancements took off in the 1990s and 2000s, when $1.15 billion were granted.
Contributed photo
Developer Kevin Mattson
While many credit enhancement agreements simply give taxes back to developers, some of them have been used to minimize the risk to taxpayers by requiring the developer to pay for improvements rather than have them paid for by a municipal bond. Once the developer makes those improvements, the town re-pays the developer out of the property taxes.
“Then you have the private company or individual bearing the risk rather than the taxpayer,” said developer Kevin Mattson, who has used TIFs to help finance a handful of projects across the state.
Credit enhancement agreements can effectively transform taxpayers into bankers.
The credit enhancement is “gap financing,” said Daniel Stevenson, Biddeford’s economic development director who was in charge of state tax incentive programs between 2006-2008. It’s “money going back to a business owner or developer to offset costs to actually make the deal happen.”
In 1997, the city of Bath voted to give back $81 million in a TIF to Bath Iron Works for its shipyard expansion, which the Portland Press Herald wrote “would help pay off loans needed for the expansion.”
In 2011, Portland agreed to return $31.5 million in a TIF to a project at Thompson’s Point that included a concert hall and hotel and office space. The Thompson’s Point developers told city officials that the project could not go ahead without the tax rebate because the site posed construction problems requiring expensive solutions.
While some credit enhancement tax credits are conditional, tying the reimbursements to investment levels, job salaries or site improvements, some, like the BIW and Thompson’s Point deals, are straightforward subsidies to the developer (BIW used a small percentage of the TIF to do infrastructure improvements). That leads Delogu to charge that the public is being forced to “underwrite the capital investment costs of private sector enterprises.”
“The credit that is being enhanced is the credit of the applicant,” Delogu said.
Mattson, the developer, also has concerns about the liberal use of credit enhancement agreements.
“In the old days, TIFs used to be very straightforward,” Mattson said. The idea behind them was: “We need to put infrastructure in for this project, can we get the taxes that this project generates to pay for them?”
But the current version of TIFs-with-credit-enhancements, said Mattson, “are a great tool that could be easily abused in a community.”
Town officials may be under pressure, for example, to give in to a company’s demands for tax money if the company is the largest employer in that town and is threatening to close down or move away.
“When you’re dealing under duress with the TIF, that’s a problem,” said Mattson.
“There are TIFs that pay money back that are unrestricted. Wow."
But, giving that money back to developers and businesses, said Biddeford economic development official Stevenson, is one of the few ways Maine’s municipalities can attract economic development.
“In order for Maine to be competitive with other states, we have a very small toolbox in order to leverage enough tools together to make a deal happen,” he said. “In the city of Biddeford, we can barely pull these projects together…. Access to capital is more and more difficult.”
That, however, overlooks the tools the state has to help cities attract businesses, from business equipment tax exemptions to sales tax exemptions to rebated income taxes and other programs.
Legislators are considering reducing state business tax subsidies by $40 million this year, referring to such programs as the state’s “secret budget” that costs half a billion dollars a year. And that number does not take into account the TIF program.
Tomorrow, part two: How TIFs can increase – or decrease – a community’s state aid
The Maine Center for Public Interest Reporting is a nonpartisan, non-profit news service based in Hallowell. Email: mainecenter@gmail.com. Web: pinetreewatchdog.org.
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