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Audit: TIF revenue projections inflated by $167 million
TIF Commission says audit did not include key factors
By: Gene Hanson
Revenue projections on tax-increment-financing projects in Kansas City have been inflated by $167 million, according to a report by the city auditor.
But the Kansas City Tax Increment Financing Commission said the controversial audit completed months ago failed to consider key factors in its analysis.
The TIF Commission staff, in a written response to the audit, claimed the audit failed to consider amendments to TIF projects after inception, as well as Payments in Lieu of Taxes, or PILOTS, that are returned to taxing jurisdictions.
That alone, the response said, accounted for more than $130 million in revenue the audit report failed to consider.
In addition, the TIF Commission staff said the audit did not consider reconciled revenue, such as TIF payments transferred to the TIF Commission by the various counties, and revenue received by the city and transferred to the TIF Commission. Together it amounted to more than $36 million.
“The most up-to-date revenue projections were made available to the city auditor’s staff,” the TIF Commission response said. “However, for the purposes of their analysis, these reconciled revenue amounts were not used.”
The TIF Commission response said updated projections maintained by the commission show the entire TIF program performing at nearly 75 percent of projections.
A breakdown of 41 TIF projects showed them collectively performing at 74 percent of revenue projections. The projects included many of the high-performing projects in the Northland such as Shoal Creek, KCI Corridor, Briarcliff and Barry Towne. It showed total projected revenue of $333.5 million and actual revenue of $246.6 million, or $86.8 million below projections.
Kansas City mayoral candidate Mark Funkhouser has been critical of TIF projects, questioning the need for doling out tax incentives to what he called “well-connected developers.”
“The focus of this audit was to determine how well the city controls TIF projects, and if they aren’t properly controlled, what are the consequences,” he said. “Frankly, I can’t imagine that the current auditor, Gary White, would make a mistake of more than $150 million. I also can’t believe he would ignore amendments to TIF projects, and other revenue reconciliations.”
The TIF Commission response also took issue with the audit’s questioning the number of jobs created by TIF projects.
“The TIF program has created 19,457 jobs,” the commission said. “These jobs are only the jobs that are created by the employers associated with the development. It does not consider the numbers of jobs that are created in the construction industry by the development.”
Business Editor Gene Hanson can be reached at 389-6638 or at ghanson@npgco.com.
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But the Kansas City Tax Increment Financing Commission said the controversial audit completed months ago failed to consider key factors in its analysis.
The TIF Commission staff, in a written response to the audit, claimed the audit failed to consider amendments to TIF projects after inception, as well as Payments in Lieu of Taxes, or PILOTS, that are returned to taxing jurisdictions.
That alone, the response said, accounted for more than $130 million in revenue the audit report failed to consider.
In addition, the TIF Commission staff said the audit did not consider reconciled revenue, such as TIF payments transferred to the TIF Commission by the various counties, and revenue received by the city and transferred to the TIF Commission. Together it amounted to more than $36 million.
“The most up-to-date revenue projections were made available to the city auditor’s staff,” the TIF Commission response said. “However, for the purposes of their analysis, these reconciled revenue amounts were not used.”
The TIF Commission response said updated projections maintained by the commission show the entire TIF program performing at nearly 75 percent of projections.
A breakdown of 41 TIF projects showed them collectively performing at 74 percent of revenue projections. The projects included many of the high-performing projects in the Northland such as Shoal Creek, KCI Corridor, Briarcliff and Barry Towne. It showed total projected revenue of $333.5 million and actual revenue of $246.6 million, or $86.8 million below projections.
Kansas City mayoral candidate Mark Funkhouser has been critical of TIF projects, questioning the need for doling out tax incentives to what he called “well-connected developers.”
“The focus of this audit was to determine how well the city controls TIF projects, and if they aren’t properly controlled, what are the consequences,” he said. “Frankly, I can’t imagine that the current auditor, Gary White, would make a mistake of more than $150 million. I also can’t believe he would ignore amendments to TIF projects, and other revenue reconciliations.”
The TIF Commission response also took issue with the audit’s questioning the number of jobs created by TIF projects.
“The TIF program has created 19,457 jobs,” the commission said. “These jobs are only the jobs that are created by the employers associated with the development. It does not consider the numbers of jobs that are created in the construction industry by the development.”
Business Editor Gene Hanson can be reached at 389-6638 or at ghanson@npgco.com.