Politicized Belleville TIF district results in lawsuit from small business owner

There’s an old saying that goes, “don’t mix politics and business,” and as long as your business isn’t politics that’s some pretty wise advice. Unfortunately, nowadays government is more frequently going out of its way to mix business and politics in the form of tax increment financing districts, or TIF districts, and corporate welfare. For...

There’s an old saying that goes, “don’t mix politics and business,” and as long as your business isn’t politics that’s some pretty wise advice. Unfortunately, nowadays government is more frequently going out of its way to mix business and politics in the form of tax increment financing districts, or TIF districts, and corporate welfare.

For example, take the story of the city of Belleville and Dianne Rogge, the owner of the old Pour Haus bar.

According to the Belleville News-Democrat:

A Belleville business owner and political opponent of Mayor Mark Eckert and the Good Government Party filed a federal lawsuit against the city claiming her civil rights were violated when the city ordered her to remove a sign from her window.

The flap began earlier this year when Dianne Rogge, the owner of the old Pour Haus in the 1900 block of West Main Street, requested $15,000 in tax increment financing from the city to renovate the bar, but she claimed she was denied because she supported Mayor Mark Eckert’s political opponent Phil Elmore. Rogge put up a sign in her window that stated, “No TIF for us, Tks B’ville.”

City employees Bob Sabo, director of health and housing, and the city’s building commissioner Paul Bauman sent her letters in June ordering Rogge to remove her TIF sign or face a $500-a-day fine.

Any time a municipality sets up a TIF district, that municipality becomes subject to an increased opportunity for abuse and failure. TIF districts raise property tax rates for property owners in all overlapping taxing districts, and higher tax rates don’t lead to faster economic growth. A study of 235 municipalities in the metropolitan Chicago region from the University of Illinois’ Institute of Government and Public Affairs show that “cities without TIF’s grow faster.” TIF districts actually hinder economic growth overall.

Creating a TIF district gives politicians the power to pick winners and losers in the local economy, instead of fostering a market-based economy where businesses have to serve customers in order to succeed. Politicians often abuse their power to tax and redistribute resources in the economy by rewarding political supporters or punishing opponents, which appears to be the case in Belleville.

While I don’t have much sympathy for the Pour Haus not receiving their share of Belleville’s corporate welfare handouts, I’m not surprised they asked. The city gave Kroger Co. $200,000 and gave Loflin Furniture $159,000 in TIF money. By doing so the city of Belleville is creating a perverse and destructive business environment where businesses succeed or fail based on how many special favors they are able to extract from government, rather than providing value to customers on a level playing field.

The infringements of Rogge’s constitutional First Amendment rights to political speech are particularly chilling. Many municipalities across the country attempt to enforce political sign ordinances to discourage people from exercising their First Amendment rights. Usually these tactics are used when citizens’ viewpoints don’t line up with the powers that be. What’s particularly interesting in Belleville is that Rogge previously had a non-political sign up in her window, but received no complaints or citations from the city, strengthening suspicions that the $500 per day fine from the city of Belleville is politically motivated.

With good reason, political sign ordinances are frequently overturned by the courts as being blatantly unconstitutional.

The lesson learned from Belleville is that TIF districts are overtly political entities. Politicians use the increased sales and property tax revenues to reward select businesses, which are often politically connected, with corporate welfare handouts.