Downtown CRA Taxes
Listening to our Clearwater City Council members agonize over which recreation center to close, what library hours to reduce and where to cut back on EMS services to keep from raising taxes, I was feeling sympathetic. Then I remembered TIF. That's the initials for special money reserved for pampering the property owners and developers of Downtown Clearwater. Money that could, and, in my opinion, should be back in the city's general fund, paying for some of the services now being eliminated.
There is a downtown fund which is paid for with a special tax on downtown properties. Years ago the downtown property owners voted to pay this tax so that the city could use it to redevelop downtown. I see no problem with that. What bothers me is the other sources.
Over twenty years ago, the city fathers decided they could claim that the section of Clearwater we refer to as "downtown" was eligible for some TIF "tax increment financing." So, they passed a law which declared that any future increase in taxes from downtown would be set aside to be spent only in downtown and only for such things as buildings and roads and efforts to promote downtown. In fact, it paid for most anything but services, like fire and police, etc.
Oh, and, hooray, county taxes from the downtown were included also.
Real estate taxes from the rest of the city go into something called the General Fund. This pays for the workings of the city and services to the community -- libraries, recreation centers, police, fire, salaries, public events, landscaping, etc.
The Downtown fund is expected to receive $1,217,557 from city real estate taxes alone, for 2009-2010 spending. Some of this will go to developers as a thank you from the city for developing in downtown Clearwater. Some call it a thank you. Some call it "incentives". I call it bribing developers with money that should be in the general fund, helping to pay for services to the entire city.
Take the giant building sitting empty beside the bridge, called Water's Edge, for instance. The owners of this property pay taxes, but at least $1,000,000 of it is promised back to the developer as a thank you for tearing down one of our most cherished historical buildings (Calvary Baptist Church) and putting up a huge building, "accidentally" using a 30 foot wide section of our bayfront land in the process.
Our real estate taxes go into the general fund. So do mine. What's so special about downtown that they get to keep all of theirs for their own use, while using some of ours to pay for services they need, such as library, parks, fire and police protection?
I have, over the years, asked succeeding councils, "What's so special about downtown? Why should the rest of us make sacrifices so that downtown can have more money spent on it? Why do we even think of this place as downtown anymore?"
They have never answered my question. I believe that's because they can't. Downtown is no longer Clearwater's downtown in any definition of the word. It is no closer to being redeveloped than it was when they instigated the TIF. But it has become an established custom, a habit, an unquestioned rabbit hole.
They talk about "improving Clearwater's tax base" but all the improvement in taxes, until 2019, simply goes back into downtown.
A Clearwater City Commission signed the TIF into existence. The current Clearwater City Council could sign it out and, once they've paid off all its debts to developers and such, the money could be back in the General Fund, paying its share of services to the city.
- Anne Garris
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