k-12 tax & $pending climate: How a development tool can increase property taxes
Development-spurring TIF has consequences in Wisconsin’s taxpayer-protecting levy limits, but there’s a way around tradeoff
“There’s good TIFs and bad TIFs,” as one economic development figure, the head of the Metropolitan Milwaukee Association of Commerce, put it to the Badger Institute last spring.
But good or bad, all uses of tax increment financing — a way of paying for public improvements through the added land value they eventually lead to as a way to spur development — can raise existing residents’ property tax bills, at least the way the tool is used in Wisconsin, according to another long-prominent voice on the issue.
“I’m not opposed to TIF,” said Duey Stroebel, a retired state senator from Saukville who previously had been in land development. “If you have a brownfield, by all means, you’ll benefit your taxpayers by getting that property back on the tax rolls.” But it does mean, he said, “you’re committing your taxpayers” — because of the way TIF interacts with the state’s municipal levy limit.
Tax increment financing was spotlighted this year after opponents of a data center near Port Washington complained that the city used the financing tool to pay for water and sewer infrastructure at the 647-acre site on former farmland.
Opponents saw the financing as a subsidy, but the city and regional development boosters pointed out that the data center developer paid for up-front for infrastructure the city will own. That owner will be reimbursed over time out of the additional taxes the city can levy on land suddenly made much more valuable by the development — which in turn wouldn’t have happened without the infrastructure. “It’s a closed loop,” as one observer said.
