Mayor Soglin seems to have established a pattern for his latest stint as mayor. He proposes some controversial policy, hears the complaints, then compromises. First, he asked Central Library to secure private funds before construction. Then he floated the idea of ending Ride the Drive. He eventually, and wisely, softened the Central Library project fund-raising requirements and found a way to continue Ride the Drive.
His most recent controversial proposition is cutting the amount of Tax Increment Financing to the Edgewater building from $16 million to $3.3 million. He would do this in order to use the funds to spend on other public projects.
Like his previous proposals, he has the right idea to cut the amount of TIF to the Edgewater project. Government should retain a limited role in the economy and stay out of business' way, not shower them with subsidies. But sometimes ideals don't match up with harsh political realities.
Promises were made and government money is unfortunately a big attraction to businesses. It would be best for Madison if the mayor preserved the level of TIF funding to the project.
If Soglin's funding reductions were to be carried out, it would create major trust issues with Madison and new businesses. The city told the Edgewater developers that there would be TIF for their renovation. Call me old-fashioned, but I think that promises should be kept, especially when millions of dollars are involved.
In a discussion, Ald., Scott Resnick, 8th district, gave his objection to Soglin's decision. He believes businesses would be weary of dealing with Madison if they knew if their deals with the government could end just because of new leadership.
Resnick is right. Who would want to risk coming to Madison when a new mayor could revoke funds in the middle of your project?
While new leaders have the option to move policy in a new direction, they should not do so in a way that makes the city seem—for the lack of a better word—unstable. It is unfortunate that former Mayor Dave Cieslewicz decided to put so much money toward the project, but Soglin should keep the deal in place to keep face with businesses which are needed to drive and grow the city's economy. If future TIF discussions come up, then Soglin should push for smaller, more reasonable amounts of TIF.
Another reason the funding should stay is because city-level TIF districts are becoming more common, making the financing option a make-or-break deal for many interested business. Resnick described a similar situation when he explained how Epic Software, one of the area's largest software companies, chose to move to Verona, instead of East Washington St., in order to more easily secure TIF.
It is unfortunate, but businesses have come to expect and, in some cases, depend on government funds to operate. Continuing to promote government funding to businesses just puts pressure taxpayers to potentially offer more money and benefits to companies to come to or stay in their cities. However, if Soglin is not willing to play the same games as surrounding cities, Madison could lose potential new businesses, something the city cannot currently afford.
Large corporate subsidies are by no means unique to Madison. In Illinois, Gov. Pat Quinn shelled out almost $100 million in taxpayer funds to Motorola for incentives to stay in Illinois after they threatened to leave after a state corporate tax hike. When corporate welfare becomes the norm, governments and tax-payers lose out.
Soglin's intentions are in the right place. Businesses should operate without millions of dollars of tax payers' dollars, leaving the government to focus on parks, libraries and other public developments.
But given the previous mayor's choice to give TIF funding to the Edgewater project and the reality that businesses often leave to find funding elsewhere, Soglin should follow his pattern of suggesting good ideas and compromising with the rest of the city.
Matt Beaty is a junior majoring in math and computer science. Please send feedback to opinion@dailycardinal.com.
