by Alex Marshall, Editor, Spotlight on the Region
Speaking of raising money, the city's Independent Budget Office recently released an excellent primer on tax increment financing, which is being discussed for financing the proposed $1.5 billion extension of the No. 7 subway line. The report analyzes how TIF has worked -- or not worked -- in other cities, from Chicago to Washington DC. This type of financing, which Haussmann used with varying success to pay for redeveloping Paris in the 1850s, works by taxing the rise in property values around an infrastructure improvement in order to fund the infrastructure construction itself. The report discusses TIF's uneven record in other cities, including not raising sufficient revenue, fragmenting a city's tax base, and potentially driving away development. It also notes that TIF has never been used to fund something as expensive as a subway extension. See www.ibo.nyc.ny.us.
Speaking of financing, J.W. Mason, in City Limits magazine's current issue, endorses reinstating the stock transfer tax, which was effectively cancelled in 1981. If reinstated at the old rate in today's "hyperactive markets," Mason says the stock transfer tax would raise an astonishing $8 billion a year - more than enough to close the city's budget gap. If reinstated at a far lower rate, it could still raise substantial sums for the city. The city's competitors in Hong Kong, London, Singapore and elsewhere already have stock transfer taxes. See www.citylimits.org.
Speaking of raising money, the city's Independent Budget Office recently released an excellent primer on tax increment financing, which is being discussed for financing the proposed $1.5 billion extension of the No. 7 subway line. The report analyzes how TIF has worked -- or not worked -- in other cities, from Chicago to Washington DC. This type of financing, which Haussmann used with varying success to pay for redeveloping Paris in the 1850s, works by taxing the rise in property values around an infrastructure improvement in order to fund the infrastructure construction itself. The report discusses TIF's uneven record in other cities, including not raising sufficient revenue, fragmenting a city's tax base, and potentially driving away development. It also notes that TIF has never been used to fund something as expensive as a subway extension. See www.ibo.nyc.ny.us.
Speaking of financing, J.W. Mason, in City Limits magazine's current issue, endorses reinstating the stock transfer tax, which was effectively cancelled in 1981. If reinstated at the old rate in today's "hyperactive markets," Mason says the stock transfer tax would raise an astonishing $8 billion a year - more than enough to close the city's budget gap. If reinstated at a far lower rate, it could still raise substantial sums for the city. The city's competitors in Hong Kong, London, Singapore and elsewhere already have stock transfer taxes. See www.citylimits.org.
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