Tracker Pixel for Entry

​Tax incentives have outlasted their usefulness

Last Word | December 13th, 2017

Downtown Fargo, Roberts Street - photograph by Sabrina HornungBy Tony Gehrig

tonygehrig@gmail.com

I do not blame any company for seeking incentives. Rather, I blame the government for giving them away. Incentives represent an unfair and unsustainable tax system that affects real people.

Some proponents, mainly those receiving the incentives, are attempting to rebrand incentives as a good thing for everyone. Many even advocate for expanding them even further and for longer durations.

In Mike Allmendinger’s recent letter published in The Forum, and in comments made during Fargo’s Tax Exempt Review Committee, he detailed his unfounded argument that incentives reduce property taxes by four percent for all of Fargo’s residents.

Mr. Allmendinger’s comments made two large and frankly incorrect assumptions. The first is that downtown growth between the years 2000 and 2017 was solely due to incentives, and downtown would not have grown by one dollar since incentives began. We know this isn’t true because the majority of downtown businesses have never received an incentive.

However, I have always said that incentives can and should be used for a limited time and scope for blighted areas. Downtown Fargo is no longer a blighted area and is home to the most valuable land in the state. To suggest that, without indefinite and vast incentives, Downtown Fargo would today look the same as in 2000 is simply a bridge too far.

The initial five-year Renaissance Zone experiment was a success and we should have stopped after five years. We did not. We continued and expanded it at a breathtaking speed. This is a mistake that we are continuing to allow and to your detriment.

Second, the four percent reduction statistic cited by Allmendinger assumes that the Fargo City Commission reduced property tax mills by 11.56 percent solely because of downtown growth. That is absurd, considering that all of Fargo has grown massively since 2000. The vast majority of the growth occurred without any incentives.

The problem is not that incentives exist. The problem is that, for the past 20-plus years, incentives go on the books as fast as they come off. While we see increased values in Fargo both from new and existing buildings, we are adding too many tax-exempt properties, meaning we will never realize the tax savings being touted by Allmendinger. The only way we would is if we slow then stop new incentives altogether.

The talk around City Hall is that projects are becoming more expensive as downtown land becomes more valuable. The fear is that development will slow due to these costs. Proponents both inside local government and in development are even suggesting we should offer longer and larger incentives to keep the ball bouncing. This is precisely how economic bubbles occur.

We have inflated downtown with unnatural government dollars for far too long, the prices and values have skyrocketed, and ultimately, more incentives will be required to maintain momentum. At some point, not even incentives will be able to prop up downtown and the market will self-correct. If we do not slow and someday soon end this scheme, we will all be left holding the bag. This is the classic mistake made by hundreds of communities in the past.

Your taxes are not going down because of incentives. In fact, your property tax bill is seven percent higher because of incentives, as reported by The Forum. A better plan is to reduce taxes by at least seven percent and cease any new incentives.

A lower, sustainable and predictable tax rate over the long term is substantially more attractive to businesses and better for the economy than incentives, which create booms and busts. The public has seen through the incentives racket and they have had enough.

[Editor’s note: Commissioner Tony Gehrig was elected to the Fargo City Commission in April, 2015]

Recently in:

By Alicia Underlee Nelsonalicia@hpr1.comNorth Dakota communities will join a “nationwide day of defiance” against authoritarianism and President Donald Trump’s policies on Saturday, June 14. A range of "No Kings" events…

Back-to-school season is on the horizon, but there's still plenty of summer left. Check out our favorite August attractions and events in North Dakota and western Minnesota. And if if you missed them, here are a few excellent May…

June 21, 11 a.m. - 11 p.m.Fargo Theatre, 314 Broadway N., Fargo“We Watch Shudder,” Fargo’s favorite horror podcasters, bring on the darkness during the longest day of the year. The Darkest Day of Horror Film Festival features…

Fighting the good fightBy Sabrina Hornungsabrina@hpr1.com Over two thousand rallies took place nationwide June 14 as part of the “No Kings" protest. Ten of those protests were held in North Dakota, with thousands in attendance.…

By Ed Raymondfargogadfly@gmail.comWe need Paul Revere on a Harley: “ants and autocrats are coming!”The Asian needle ant has been nesting in the American South since at least 1932. It probably hitched a ride on a freighter from…

By Rick Gionrickgion@gmail.com Holiday wine shopping shouldn’t have to be complicated. But unfortunately it can cause unneeded anxiety due to an overabundance of choices. Don’t fret my friends, we once again have you covered…

By Rick Gionrickgion@gmail.com The weather warmed up quickly here in the upper Midwest this spring, sparking prime eating season. This means burger battles, food trucks and lake-season food travel. The 2025 Downtown Fargo Burger…

By Alicia Underlee Nelsonalicia@hpr1.comThe Moorhead Public Library will offer three free, all-ages outdoor concerts featuring regional bands this summer. The series begins on June 12 with the Meat Rabbits, a group that blends…

By Greg Carlsongregcarlson1@gmail.com The June 9 death of musician Sylvester Stewart, known much better by stage name Sly Stone, saw an outpouring of tributes, memorials and appreciations from some who knew him personally and many…

By Deb Wallworkdwallwork@icloud.comI first met Catherine Mulligan at a party at her house. It was a small gathering, spontaneous, just a few people over for dinner. Directed toward a stack of plates and bowls and a big pot warming…

By Alicia Underlee Nelsonalicia@hpr1.comAct Up Theatre, in partnership with Minnesota State University Moorhead, will present “The Sound of Music” on June 10-14. All shows are at 7:30 p.m. at the Minnesota State Moorhead’s…

By Annie Prafckeannieprafcke@gmail.com AUSTIN, Texas – As a Chinese-American, connecting to my culture through food is essential, and no dish brings me back to my mother’s kitchen quite like hotdish. Yes, you heard me right –…

By Sabrina Hornungsabrina@hpr1.comNew Jamestown Brewery Serves up Local FlavorThere’s something delicious brewing out here on the prairie and it just so happens to be the newest brewery west of the Red River and east of the…

The drug that keeps re-purposing itselfBy Ellie Liveranieli.liverani.ra@gmail.com There is a drug that is getting a lot of attention nowadays all over the world. It has various commercial names (Ozempic, Wegovy and Rybelsus), but…

By Alicia Underlee NelsonProtests against President Trump’s policies and the cuts made by Elon Musk’s Department of Government Efficiency (DOGE) are planned across North Dakota and western Minnesota Friday, April 4 and…

By Vern Thompsonvern.thompson@rocketmail.com Working in the Bakken oil fields of the Williston Basin is so different from my home in Fargo. I'm not judging, because the people working and living in western North Dakota are very…