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The Way I See It!

I am an Ultra-Conservative, Alpha-Male, True Authentic Leader, Type "C" Personality, who is very active in my community; whether it is donating time, clothes or money for Project Concern or going to Common Council meetings and voicing my opinions. As a blogger, I intend to provide a different viewpoint "The way I see it!" on various world, national and local issues with a few helpful tips & tidbits sprinkled in.

Reasons Why You Have to be Careful with TIF Money

Wisconsin, Cudahy, TIF, Taxes

TIF doesn’t stand for Taxes Is Free.  Cities must act responsible with TIF Money.

 

When the full Cudahy audit of the TIF comes out, I think people will be surprised of how much (little) is truly left.

 

Here is a good reason why! 

 

Bold emphasis is mine!!!

 

Tax incremental financing bailout moves through Legislature

By Tom Daykin of the Journal Sentinel

Jan. 19, 2010 7:15 a.m. 

 

 

A bill that would allow more time for Wisconsin's financially troubled tax incremental financing districts to pay off their debts is moving through the Legislature.

 

With a TIF district, a community typically borrows money to help fund a real estate development.  The project's property taxes are used to pay off that debt.  Once the debt is paid, the taxes flow to the community, its school district and other local governments.

 

However, some TIF districts are running into trouble.  They include districts in smaller communities, such as Warrens and Necedah, as well as larger cities, including Milwaukee.

 

The main culprit is the recession, which has brought store closings, layoffs and a drop in travel.  That affects the value of shopping malls, office buildings, hotels and other commercial properties.

 

Declining values result in lower property tax bills.  So it takes longer for those property tax dollars to pay off city or village funds used to help finance commercial development.

 

The bill, AB 426, gives a "distressed" district up to 40 years from the date it was created to pay off the debt. State law now limits districts to a maximum life of 27 years.  The bill also allows a community to take revenue generated by a successful district to help pay off a distressed district's debt.

 

Supporters of the legislation say it will allow communities and their lenders more time to restructure debts.

 

But as long as a TIF district stays alive, its property tax revenue is used to pay off debt and doesn't flow to the community, its school district and other local governments.  That means local taxpayers make up the difference.

 

The bill recently received unanimous approval from the Senate's Committee on Economic Development. It was approved last fall by the Assembly on an 81-14 vote.

 

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