This week a brand new Dick’s Sporting Goods store opens in Muncie near my home. Because my next major sporting goods purchase will be a pair of size 13 wide cleats for my 14-year-old son, I will visit the store shortly. As it turns out, this particular store sits in a Tax Increment Financing district within Muncie, so it raises a lot of important questions about the role of government in supplying athletic footwear to a middle school linebacker.

The structure of Tax Increment Financing (TIF) in Indiana is similar to other states. A piece of property is designated as TIF district (redevelopment district in this case) and increased taxes due to new development are used at wide discretion of the redevelopment commission. In this case, some of the money appears to be directed initially at providing some infrastructure to lure Dick’s and a couple other retailers. Because these TIF districts never go away, the redevelopment commission will have many opportunities over the coming centuries to think of other uses for the money. Not surprisingly this raises many legitimate policy questions.

Muncie is a retail hub for several surrounding counties, but it cannot be said to enjoy a cornucopia of high-end retailers. Of course, improving the retail mix in Muncie would make it a more attractive place to live and bring some new jobs. This is good, of course, and a typical study from accounting consultants add up the new jobs that Dick’s says it will create and that will be reported as the employment benefits. That is nonsense and is why it is as hazardous to ask accountants about the economy as it is to have an economist do your taxes.

As I write this, my son is at football practice and wearing size 12 wide cleats purchased from another Muncie sporting goods store. New cleats from Dick’s won’t be new economic activity, simply a shift in spending from another local store. While a new Dick’s might attract some new spending on sporting goods, the bulk of its sales will come at the expense of other local sporting goods and apparel stores.

Competitive markets are necessary for a growing economy, but in this case Dick’s has been subsidized by taxpayers. That is not competition, but the problem for Muncie is more than simple fairness. Since Dick’s and both other sporting goods stores are in the school district, this TIF will surely limit or reduce future tax revenues for schools.

Most Indiana communities need a lot of work on their quality of place and many need the tool that TIFs provide. But, they also need to think about TIFs more wisely. As a first step the legislature should limit their duration and allow school boards vote on their approval.

I hope this turns out well for Muncie, a city that is finally doing most of the right things. Maybe some of these TIF dollars will find their way to programs in local schools. That’s real economic development. Still, no family needs local government helping us choose where to buy athletic shoes. You have more urgent concerns.

Note: The views expressed here are solely those of the author, and do not represent those of funders, associations, any entity of Ball State University, or its governing body.