Common TIF Pitfalls
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Revenue diversion: Funds that would support schools, libraries, and public safety are redirected to developers.
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Overuse and misuse: Cities sometimes use TIF for projects that would have happened anyway, undermining its “but/for” justification.
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Lack of transparency: TIF decisions are often made outside normal budget scrutiny, reducing public accountability.
Our Mission
The No Free Rides Committee is dedicated to educating and empowering voters in Rapid City, SD, about the proposed $125 million Libertyland TIF, the largest TIF district in South Dakota's history. We strive to ensure every citizen has a voice in decisions that impact our community’s future. By providing clear, accessible information and advocating for transparency, we help residents make informed choices about taxation and development projects that affect their community's future. Through grassroots efforts, including the collection of over 5,000 petition signatures to get the Libertyland TIF to a vote of the people, our mission is to foster informed public participation and protect Rapid City taxpayers from unnecessary financial burdens.
There is a lot of spin going on over the Libertyland Tax Increment Financing (TIF) District.
Here are some FACTS:
Fact 1:
Prior to passing the Catalyst TIF ($84M) and the Libertyland TIF ($125M), Rapid City had 18 active TIFs at an average amount of $12.6M.
Fact 2:
Only five of Rapid City’s 20 TIFs, including Catalyst and Libertyland, contain discretionary grants. TIFs are generally used only for infrastructure.
Fact 3:
The Libertyland project plan states that discretionary grant funds “will” be used “for the development of the commercial and entertainment zone and amenities of the resort village.”
Fact 4:
The Secretary of the SD Department of Revenue has stated “but for TIFs, all (city, county, and state) property taxes would be lower.”
Fact 5:
To date, there have been no audits to establish whether TIFs have historically had a Return On Investment (ROI) high enough to justify the loss in property tax revenue caused by TIFs.
Fact 6:
Pennington County is currently losing revenue from $700M in property valuation due to Rapid City TIFs. Remember, “but for the TIFs”, your mill levy*, and thus your property tax, would be lower.
* Mill Levy: Property tax rate per thousand dollars of assessed value.
Fact 7:
When a city grants a TIF, that decision affects ALL state and county residents.
Fact 8:
The city captures ALL property tax revenue from the increased value of property in the TIF district, including the money that would otherwise go to schools, the county, and other taxing entities.
Fact 9:
All South Dakota property owners pay increased property taxes to make up for lost revenue to the schools, but counties are just out of luck.
Fact 10:
Historical background: TIFs originated in California in 1952 to raise local funds to match federal grants but were repealed in 2012 due to overuse and abuse. In 2014, California replaced TIFs with Enhanced Infrastructure Financing Districts that have stricter limitations. TIFs came to South Dakota in 1978 with a narrow purpose: to address blighted urban areas. Over the years, lawmakers have broadened the use of TIFs without providing firm guidelines or oversight. TIF laws need to be reformed.
Fact 11:
The former legislator who sponsored the 1978 South Dakota TIF law signed the petition to vote on the Libertyland TIF.
Fact 12:
The Libertyland TIF assumes that no development will occur on this land in the future. An unreasonable assumption, considering the rate at which our city is growing.
Fact 13:
Any gain in sales tax revenue from new development areas could result in losses in other areas of the city, resulting in zero net gain. Rapid City has seen the displacement phenomenon before, from the shuttering of downtown business to the emptying of the Rushmore Mall. Development of new local commercial areas will often cannibalize existing businesses.
Click below to learn more about Tax Increment Financing
David Merriman, Lincoln Institute of Land Policy
Merriman’s comprehensive review of over 30 studies concluded that TIF districts rarely increase overall economic activity. He found that many projects would have occurred without TIF incentives, undermining the “but/for” justification.