|A justifiably incredulous Senator Bettencourt|
"Though they join forces, the wicked will not go unpunished;
But the posterity of the righteous will be delivered."
[Note: You can view the overwhelming majority of the hearing here; you can view our testimony about 25 minutes in here.]
We just finished testifying in a Senate hearing that was...more eventful than we anticipated.
As we discussed last week, earlier today the Senate Committee on Natural Resources and Economic Development heard SB 650 (Bettencourt). Senator Bettencourt's bill would increase transparency in a type of local level corporate welfare known as "Tax Increment Reinvestment Zones" (TIRZ's). TIRZ's are a way for local governments to engage in subsidized redevelopment. Senator Bettencourt's bill would require TIRZ declarations to be done at a public meeting with a public notice. The bill also tightens up the definition of the type of property that can qualify as "blighted."
We weren't aware of it prior to this hearing, but apparently TIRZ's are out of control in the Houston area. Making matters worse, these subsidies have frequently been used (Note: What else is new?!?) to subsidize already wealthy areas. In other words, instead of promoting economic development in low income areas, they're actively hindering it. We were astonished to learn that the Houston Galleria is getting special tax financing. We also learned from Senator Bettencourt that TIRZ's have taken over $100 million out of the City of Houston's municipal budget.
To be honest, we had expected this hearing to be similar to the one last week on Taxpayer funded lobbying. We were expecting to testify ourself, but otherwise to only have a few people show up. Boy were we wrong; anyone and everyone (and their brother) who's ever thought about getting a subsidy from a local government showed up.
Some highlights from public testimony: The Arlington chamber was opposed; if the local chamber that pushed that ridiculous stadium bond last fall was opposed, that should tell you everything you need to know. Senator Bettencourt pointed out that if the stadium area in Arlington qualifies for TIRZ status, then TIRZ status is not being applied to genuinely blighted areas. Some dude with a masters degree in Urban planning from Corpus Christi also testified in opposition. Personally, we think that the opposition from the urban planning industrial complex is a point in favor of the bill. Beyond that, opposition was a the predictable collection of local Chambers of Commerce and 'redevelopment authorities' etc.
As to our testimony: We testified in favor of the bill. We pointed out that this is yet another example of government picking winners and losers at the local level. Furthermore, it's unjust to expect existing business and property owners to compete with subsidized redevelopment. As to the definition of blight, we pointed out that the transportation bond Austin (Note: Unfortunately) passed last fall is full of this nonsense. It seems far fetched to consider South Lamar blvd in Austin to be "blighted."
Bottom Line: The tendency of local governments across Texas to engage in economic micromanagement needs be curtailed. That includes these types of subsidized "redevelopment" agreements. We'll see what happens, but we commend Senator Bettencourt for bringing this discussion forward.
Note: See our discussion of Jane Jacobs and "cataclysmic money" here and here.