August 23, 2008

From TheKCGuy

I got thinking about sales tax free district that may be created in Kansas City. While that area certainly could use some stimulus to help revitalize it, I'm curious about one aspect of making it sales tax free. One of the other tools that the city can use to spur development is TIF financing, where the increase in sales tax generated by businesses are used to finance bonds that were sold to develop an area. If this area were declared sales tax free for some time, no businesses built there would generate a revenue stream to be able to pay off TIF bonds. Therefore, it seems to me that declaring an area free from sales taxes will also make it ineligible for future TIF financed projects. I hope that's not an unintended and unanticipated consequence of this proposal.

I looked around a bit to see if this question had been addressed before, but was unable to find much. I'm curious if any of you readers know if this question has been raised already. Perhaps the theory is that this area is so unlikely to receive a TIF financed project that this is a small opportunity to lose for the benefits that a tax free district may bring.

Today in Kansas City

• Tigers vs. Royals at Kauffman Stadium. 6:10 PM