The non-partisan Wisconsin Legislative Council confirmed something about tax increment financing (TIF) that the MacIver Institute has been warning taxpayers about for years: tax increment financing directly results in higher property tax bills for all taxpayers in that community. This contradicts what local and state government officials have claimed for years, that TIF is a win-win for taxpayers.
Legislative Council released the memo that explains everything on Nov. 29, 2022, which the MacIver Institute obtained through a records request. It explains that anytime there’s construction within a TIF district (TID), the mill rate goes up for the entire community. Essentially, local governments use the net new construction (NNC) that occurs within TIF districts to justify higher tax levies, but then exclude that new property value in the TIDs when calculating the new mill rate.
As the Legislative Council’s memo explains, “When a TID exists, and all NNC occurs within the TID, the mill rate will increase from the prior year, because the mill rate’s numerator increases while the denominator stays the same.”