Taxes are in too short supply to support random projects
Written by Michael Lewis on April 17, 2018
Critics asking whether governments return enough bang for our tax bucks might add a second question: are we getting the right kind of bang?
Take Community Redevelopment Agencies, which under Florida law target slums and blight. They’re fueled by property taxes – usually from new buildings – that exceed the amount their areas yielded when the agencies formed. The higher collections are supposed to help end blight.
But those agencies, called CRAs, have broad power to decide what uses of taxes will best aid the area. Some choices are questionable.
We don’t shock easily, but we did recoil when we read four Miami Today reports two weeks ago about how just one of Miami-Dade’s 14 CRAs was spending taxes that otherwise could have helped housing, mass transit and myriad uses countywide.
To refresh your memory on those reports, Miami’s Southeast Overtown/Park West Community Redevelopment Agency spent taxes this way:
ν$975,000 to help build the Harlem Square supper club. The same agency gave the same club $1.25 million for the same job in 2014 but “upon receipt of full plans and completing of the drawings, final pricing was obtained, indicating that additional funding for the project would be required…” Besides, the owners added another floor to club plans.
ν$375,000 to renovate the People’s Bar-B-Que. The same agency gave the same owner $1 million for the same project in 2014 but the CRA board was told there were unforeseen costs, and that reducing the project’s scope would be detrimental to its success.
ν$250,000 to a marketing group for its fifth year of running the Overtown Music & Arts Festival. The CRA has funded the July festival for those five years.
ν$220,000 to fund a firm’s summer youth training in Overtown to give internships to 60 students ages 14 to 21 for seven weeks each. If that money went directly to the students, it would be $523 apiece per week.
The same agency in years past has funded a wall mural, $200,000 to build a better area image on Twitter and Facebook, 25 surveillance cameras for police, and $90 million to the developers of the Miami Worldcenter to develop on their own property rather than somewhere else in the world.
Any of those expenditures can be defended. Maybe all are legitimate. But are these expenditures – every one of which Miami commissioners serving as the CRA board approved – the best uses of the taxing power of an improvement district?
This one CRA board is by no means the only government body to use money in less-than-targeted ways that are out of the spotlight of a county or city commission meeting at which news reporters often reveal performance.
For years it was common for those running parades, festivals, conventions and other local events like the Overtown festival to tap the airport and seaport for funds. Just one county commissioner could make it happen – until the federal government cracked down, requiring that airport funds go to aviation purposes only.
Miami’s city hall for years did the kinds of spending that the CRA is now doing, until Miami came under the thumb of a governor-appointed financial control board decades ago when the city flirted with bankruptcy.
Now the city commission, wearing a CRA badge, can spend for pet projects from another pot where cash is available and Miami Today alone has a reporter watching.
We’re not questioning the projects, but we do question whether this is the best use of money designed to uplift an area.
At the same time, we have to ask whether money is being spent in the best interest of county taxpayers who – because the county approved the CRA structure – have lost taxes that could have added transportation or housing or other vital projects in order to instead fund a barbecue, a supper club or a street festival, not to mention that $90 million subsidy for a massive private project that had been touted for years.
All these funds go to for-profit companies, not charities. That’s not necessarily wrong, if they are the best uses of the funds.
But we think all local governments ought to prioritize spending in ways that do not rest primarily on entrepreneurs showing up to ask for money for their own visions.
Again, if a priority project wouldn’t get done otherwise, we have nothing against funding for-profit developments.
But who at the CRA or city hall prioritized a supper club or a barbecue or a festival before someone asked for money in 2014 – or prioritized it again before someone returned to ask for more cash for the same project in 2018 because it didn’t happen in 2014?
We get the feeling that some CRAs have lots of money and want to spread it around in hopes that something works, which may indicate that it’s time to retire those agencies and let more taxes flow to general community needs.
If we built more affordable housing or more mass transit, or if we added more parks, or if we beefed up policing countywide, would we be better off than if we left decisions to whoever asks for money from a CRA?
County hall should think seriously about whether it’s time to rein in CRA spending in the way seaport and airport spending was reined in decades ago, or whether the CRA system is fulfilling its purpose.
Tax funds are in too short supply to miss the mark.