financial incentives

Austin voters narrowly failed Proposition 2, which would have prohibited subsidies to retail projects and would have stopped the payments of tax rebates to the Domain shopping center in North...

On Nov. 4, Austinites will vote on Proposition 2, which is about money, a mall and a matter of integrity.

The Mueller financial incentives threatened by the SDS charter amendment, courtesy of city legal staff. (via Austin Contrarian)

See this summary (pdf) by city legal staff.

The memorandum identifies several Mueller financial incentives threatened by the proposed charter amendment:  

• Project costs (including infrastructure) partially funded by City sales tax revenue collected from project retail development; 
• Sales tax committed to repay long term bonds ($12 million to date);

One other point on the proposed Charter amendment to ban "financial incentives" for retail developments.   

The proposed amendment language includes this exception to the definition of "Financial Incentives":  

(ii) a grant or loan to a small business, whose principal office is in Austin, Texas, pursuant to a generally applicable local small business loan or grant program[.]

I don't like the Domain incentives, either.  I don't like subsidies for retail.  (But then I don't like subsidies for manufacturing plants or call centers or corporate offices, either.)

True, the city needs to maintain its tax base.  But rebating the taxes from a new development is a piss-poor strategy for maintaining the tax base.  Besides being self-defeating, it forces the rest of us to pay (even if just slightly) higher taxes, potentially displaces other prospective retailers, and encourages prospective retailers to engage in rent-seeking.

Austin voters will decide on proposed Charter amendments that would affect the office of City Auditor and retail financial incentives.

Austin voters will decide in November on amendment that prohibits financial incentives to retail property developments.