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City of Madison News Release
For Immediate Release:
Sep 17, 2012
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Tax Incremental Financing (TIF) Policy Review
Madison Mayor Paul Soglin has sent the attached memo to members of the Madison Common Council and the Economic Development Committee (EDC) asking for a review of the City's Tax Incremental Financing (TIF) policy. On Wednesday, September 20, Mayor Soglin and Madison Director of Economic Development, Aaron Olver will attend the EDC meeting to discuss this issue.
Madison has historically led the state with regard to Tax Incremental Financing (TIF), having applied for a grant that led to the development of Wisconsin's TIF law. Our city has a strong track record of using TIF responsibly to create almost $1.5 billion of tax base. TIF has played a major role in revitalizing Madison's downtown, improving our housing stock, attracting new residents to the downtown, expanding employment, and investing in public infrastructure. Madison has also been a leader in developing and adopting a municipal TIF policy to supplement state statute. TIF is an important tool and it's vital we review and revise our TIF policy to adapt to changing economic and competitive factors and to learn from our evolving experience.
I am interested in reviewing and updating Madison's TIF policy for several reasons:
1. Our current policy was adopted in 2009, prior to the mortgage and real-estate-led recession and in an era when condo projects were common. We should review our policy and update it to reflect changes in real estate markets, differences in our project pipeline, and to reflect the experience we have gained.
2. Given the state's strict levy limits, maximizing net new construction is critical to future budgets. We need to ensure our policy helps the City compete for a fair share of tax base while preserving our strong track record of fiscal responsibility.
3. Regularly making exceptions to TIF policy creates uncertainty in the development community and places staff in an awkward position in negotiations with developers. We should strive to clarify TIF policy and address new situations in order to minimize the number of exceptions required.
4. TIF is a value-based tool; its usefulness is directly linked to how much property-tax base growth it helps stimulate. We need to establish careful policies to address situations where policy goals other than increasing our property tax base, such as expanding job creation or affordable housing, are at stake .
To this end, I am asking the Economic Development Committee, working with staff, to review our TIF policy and create a draft resolution containing suggested changes to policy. I hope to join Alders in introducing an updated TIF policy recommended by the Economic Development Commission to the Board of Estimates and Common Council for consideration.
Working together, we can craft a strong, responsible, competitive TIF policy to help continue revitalization of Madison's downtown and neighborhoods, grow Madison employment, increase our tax base, and make vital investments in infrastructure.