Don’t burden taxpayers with Tradepoint handout

Imagine Baltimore County Council members telling their constituents that $100 million in tax dollars will go to improve a business district in the eastern part of the county. Their constituents would be outraged. Knowing how constituents regard taxes, policymakers have gotten creative over the years. In every election, there are numerous borrowing measures on the ballot. Those who strongly resist increases in public expenditures and taxes for that matter oppose these proposed measures.

Now, it seems the creativity never ends. The latest scheme is tax increment financing or TIF. They’ve been used to finance projects including the Metro Centre in Owings Mills and the Baltimore Hilton among others in the region. Now policymakers are proposing a TIF to finance roads and water and sewage infrastructure in Sparrows Point to assist Tradepoint Atlantic as an alternative to direct subsidies (“Tradepoint Atlantic to scale back request for gov’t financing in redevelopment of steel mill site in Baltimore County,” Oct. 19).

It’s worth noting that three of Tradepoint Atlantic’s tenants have already received or at least arranged to obtain $60 million in subsidies from the federal, state and county governments. Pending approval by the Baltimore County Council, bonds will be issued totaling up to $100 million to finance infrastructure in Tradepoint’s business complex. The bonds would be paid back through a portion of the property tax revenues generated by Tradepoint. Unlike direct taxation, taxpayers also contribute to interest payments owed to the bondholders making the project even more expensive while contributing to a relationship between county officials, institutional investors and well-connected business interests

Here’s something important to consider when assessing this arrangement’s potential impact on individuals and businesses throughout Baltimore County. Suppose a company in Sparks does extraordinarily well in a particular year resulting in a higher tax base. Think, too, about an individual in the company who gets promoted and sees their pay increase resulting in a higher tax base as well. This means that both the company and the employee would pay more taxes to Baltimore County for that year.

Now, imagine if the employee was a contributor to one of the County Council members’ campaigns and arranged a deal that would alleviate him from paying additional taxes resulting from his pay increase. He then could take these funds and spend it on himself any way he chose. Anyone who found out about this arrangement would be outraged.

Well, that’s essentially what Tradepoint’s tenants will get away with if the TIF arrangement is passed. The property taxes they generate will go towards a project that will benefit them while every other business in the county will contribute property taxes for the benefit of the county.

While it’s advantageous for business growth to occur throughout the county, policies shouldn’t facilitate growth which relieves some of their responsibility and creating a burden for others.