WEDA weighs in on new TIF bill (Senate Bill 1)
Wednesday, January 18, 2017
TO: Senate Economic Development, Commerce and Local Government Committee
FROM: Wisconsin Economic Development Association;
League of Wisconsin Municipalities;
Wisconsin Realtors Association; and
DATE: January 10, 2017
RE: Senate Bill 1 and TIF modernization efforts
The above-listed organizations support the solution proposed in Senate Bill 1 to address the problem facing the Village of Oostburg caused by the current 12 percent limit on the total equalized value of taxable property permitted to be within a Tax Incremental District (TID).
Unfortunately, for many communities across the state, the 12 percent limit has restricted their use of TIF and ultimately hinders their ability to attract new development and jobs. Under current law, a municipality generally cannot create a new TID if it exceeds the current 12 percent cap. The current limit has hit small to medium municipalities particularly hard. Due to their relatively small tax base, these communities can easily “TIF out” with just a single successful TID.
The village of Oostburg is currently facing this predicament, and without relief from the 12 percent rule, a proposed $50 million development project with over 100 associated jobs could be in jeopardy. However, Oostburg is not the only community experiencing this problem. Over 55 other municipalities currently have 10 to 15 percent of their equalized values in TIDs. Instead of taking a parochial approach to solving a statewide problem, we would encourage the Legislature to address this issue in a way that would give all municipalities more flexibility under state TIF law.
The current 12 percent limit is outdated, does not reflect modern economic realities, and significantly devalues TIF – one of the only economic development tools available to local government. Passing a more expansive bill, like 2015 AB 136 to increase the TIF limit to 15 percent statewide, would give communities greater ability to encourage economic development and advance business investment that would not otherwise occur. It would also reduce or eliminate the number of individual requests from municipalities to exceed the 12 percent limit.
In closing, we applaud the solution identified in Senate Bill 1 and would urge the Legislature to pass comprehensive legislation this session to increase the current TIF limit to 15 percent for all Wisconsin communities. Thank you for your consideration of our request.