More Discussion on TIF
The issue of TIF or Tax Incremental Financing is a complicated one, but it's important, and it's a vital tool that municipalities utilize for development in a particular area, or TIF District.
TIF is a financing tool where the distribution of taxes from property in a defined geographic area is frozen for a period of 27 years. While the value of property in that area increases, the amount of money distributed to the city, county and school district remains the same. Any increased property taxes are then used to fund capitol improvements and assist developers.
At Tuesday's meeting of the Madison Common Council I spoke about the challenges facing our City's economic development. Among the factors I listed was the use of TIF by other communities. I expressed concern that other municipalities are looking beyond the traditional factors in an effort to lure a specific business. On Wednesday morning, I discovered that Assembly Bill 536 which would allow the City of Middleton to extend its TIF district another 10 years was introduced. This is precisely the problem to which I was referring.
Changing the rules of TIF financing to allow a company to move from one community to another provides no net benefit. The property tax base in one community is decreased by an amount that it is increased in another. The jobs that are being "created" in one community are not new jobs. They are simply being moved to a new community. This is a zero-sum game, and the state should not change the rules to facilitate it.
Supporters point out that these types of changes have been done before. Whether this has been done before is irrelevant. Changing the playing field where the law must be uniform statewide is neither healthy for the economy, nor fair to the communities involved. Instead of passing piecemeal legislation to help the one community at the expense of another, the Legislature should conduct a comprehensive examination of the TIF law.
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