Tax receipts make fool of former TIF boss

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In the waning days of her reign, former Kansas City, Missouri, Mayor Kay Barnes tried to defend the city’s extensive use of tax-increment financing (TIF). A stinging city audit said the TIF program had produced $233 million less than original projections. The normally cool Barnes called the report “biased” and “outrageous” at a press conference.

A criticism of TIF is that in many cases it simply slides development from one part of town to another. The tax-incentivized Wal-Mart on the site of the old Blue Ridge Mall, for instance, opened the day after a Wal-Mart off 87th Street closed.

Barnes and her allies were reluctant to accept this phenomenon as meaningful, however. At the press conference, Peter Yelorda (pictured), the Blue Cross and Blue Shield VP Barnes appointed to chair the TIF Commission, said the “substitution effect,” as it’s known among economists, was an “erroneous concept.”

Yelorda was wrong.