Newspaper article The Florida Times Union

Tax Abatement Plans Are Mostly Corporate Gifts

Newspaper article The Florida Times Union

Tax Abatement Plans Are Mostly Corporate Gifts

Article excerpt

Byline: Ronald L. Littlepage

I have spent the last several days looking up the history of taxpayer-financed incentives for businesses, otherwise known as corporate welfare.

The state we are in today -- where City Hall regularly gives away buckets full of taxpayer money -- proves Darwin's theory of evolution where the powerful (the rich) thrive at the expense of the weak (the taxpayers).

It certainly doesn't add credence to the alternate theory of intelligent design.

The debate over incentives ramped up in Florida in the late 1970s. Two main ideas were being floated then.

One involved tax-increment districts. The idea behind that was to attract businesses and other development to struggling downtowns and decaying inner-city neighborhoods.

The key words used most often in describing the districts were "slums," "blighted" and "deteriorating."

It would work like this: Property values in a tax-increment district -- the "blighted" area -- would be frozen. When development came to the area, the additional property taxes that came with it -- the increment -- would go into a special fund that would be used to make public improvements in the district. At least that was the selling point used most often.

The key words in the public improvements element were such things as "sewers," "streets" and "parks," in other words, infrastructure.

The second idea being promoted in the late 1970s was tax abatement. Under that scenario, new and expanding businesses wouldn't have to pay some of the taxes others would have to pay. The legal opinion was that the Florida Constitution wouldn't allow tax abatement.

A constitutional amendment seeking approval for tax incentives was on the ballot in November 1976 and it failed.

Undaunted, the Legislature passed a bill the next year that allowed local governments to use tax-increment financing, arguing that method didn't violate the constitution because the businesses actually paid the taxes in full. …

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