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Davenport’s Tax Rates Tell the Story PDF Print E-mail
Commentary/Politics - Editorials
Wednesday, 15 August 2007 02:37

Last week, it was reported that the Rock Island-based engineering firm eServ is close to finalizing a $6 million-plus, 15-year TIF (Tax Increment Financing) deal for its new $24 million-dollar facility sited in Davenport's 53rd Street corridor. In turn, eServ promises to bring 240 jobs to Davenport in the next three years, with an average compensation of $61,000. On its surface, it sounds like a fair bargain - but is it, really?

This TIF deal is one of the largest subsidies in Davenport's history, and further evidence that Davenport city officials continue to pursue a "development at any cost" policy that is proving detrimental to the very taxpayers that they are paid and elected to serve.

eServ pledges to bring 240 new jobs to Davenport, with 100 new jobs coming from out of the region, at $61,000-plus annual salaries. City staffers, after lobbying councilmen individually, have obtained verbal approval from enough aldermen to move forward with documents that commit taxpayers to a reimbursement of 80% of the increased value of eServ's property assessment over the next 15 years - amounting to a giveaway of $6.3 million in property taxes.

It is worth noting that critics of this "incentive package" proffer that Bettendorf was approached by eServ and declined the opportunity, knowing Davenport has a proven track record for giving away the farm, so to speak. Therefore, Bettendorf will make out just fine, because many of the 100 incoming engineers, salaried at $61,000, will choose to live in its community where the taxes are lower.

Now consider that 2006 property tax levy rates for Davenport, Bettendorf, Eldridge, and LeClaire show that Davenport has the highest tax rate of the four communities at $39.21 per $1,000 of assessed property value. LeClaire's $35.19 rate is 10% lower, Bettendorf's $34.06 rate is 13% lower, and Eldridge's $28.27 rate is almost 28% lower than Davenport's property tax rate.

In the last five years Davenport has led the pack in total property tax growth with 3.59%. LeClaire is close behind with 3.57%, Eldridge has had a 2.92% growth over the last five years, while Bettendorf has increased its property taxes by only 1.8% in the same period.

With nearly zero population growth, what is fueling Davenport's need for additional revenue from taxpayers each year? The answer is increased demand for city services and resources within the green fields of north Davenport, to support developments that were over-incentivized by lucrative TIF giveaways.

Forget all the politics and personalities associated with the controversial TIF deals implemented over the last 20 years to expand commercial and retail development in Scott Counties' green fields, considered to be the most fertile soil in the world. The inevitable real cost of these subsidies has manifested itself in the significantly higher residential property taxes Davenport residents are paying - and will continue to pay into the distant future. This overarching result cancels all other lofty claims of economic benefits used to convince aldermen to approve these injurious TIF agreements.

Here are some basic questions that require answers before moving forward:

• What measures will be taken to monitor and ensure that these promised jobs, at an average of $61,000, are created on schedule, let alone maintained in Davenport for at least 15 years, and what are the consequences if eServ is not in compliance?

• If eServ has already moved close to 100 of their employees to temporary office space in a property adjacent to the property to be developed, haven't they already proven that Davenport has the commercial real-estate inventory and necessary amenities to support their move without any incentives, or at least a substantially lower one - especially with the State of Iowa contributing?

• What incentives would be required to locate this company in the downtown where infrastructures and TIF already exist, and where the use of TIF is far more appropriate, when a high number of well-paying new jobs are involved?

• What measures need to be taken so that companies would consider downtown viable for relocation?

• How many of the persons filling the 240 jobs will reside in Davenport?

• If 60% is the limit for a TIF subsidy, why is 80% being proposed? And why 15 years? Why not five, seven, or ten years?

• After 15 years, what assessment is guaranteed - and for how long - on eServ's property? In other words, will taxpayers ever enjoy any of the increased value?

• How much has DavenportOne played in this process, with its new CEO, Jim Russell, as contractor, lesser, and rumored owner of the property to be developed for eServ?

• As averages can be misleading, how many of the 240 jobs are actually in the $61,000 range?

• What is the housing requirement for these new employees, and does Davenport have the inventory to accommodate them?

• What accountability exists for this project to deliver on all its terms? How will it be monitored and enforced, and by whom?

Davenport continues to send strong signals that it is willing to subsidize employers like Sentry Insurance, Cingular, and now eServ, giving the appearance of economic growth, regardless of the long-term negative impact. Let's not forget this is an election year, and these are complex issues that require long-range thinking that city staff and most councilmen cannot be bothered with. They prefer headlines about 240 new jobs, hoping it will have a bigger pay-off in short-term popularity.

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written by schqc, August 16, 2007
Great article, and I couldn't agree more (I had responded in a similar vein to the QCTimes article, though I didn't have all the numbers.)

TIF has become corporate welfare.

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