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I know it's "Tax Incremental Financing" or whatever... but I'd like to know what exactly it is, in as plain english as possible.
 

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TIF is a defined district such as a Central Business District in which the properties are assessed and the value is set at a certain level. The growing yearly valuation above that set value is then used for improvements to that district, but only for the benefit of that district. This is pretty common in the Detroit area.
 

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Tax incremental financing is a common tool used by municipalities to spur development.

It diverts property tax proceeds within a designated district away from the general tax rolls for a certain period of time and uses those increased revenues to pay for public improvements made within that district (new/improved infrastructure like streets, sidewalks, sewers, etc.; cleaning up environmental contamination; and demolition work, to name a few) in order spur economic development there.

When those costs are paid off, the tax incremental financing district is terminated and the property tax proceeds from improvements in the district flow back into the general tax collections where the money can be used for any public purpose.
 

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i thought an additional aspect of TIF's is that the initial developers to invest within a TIF district are given tax breaks, or relieved of paying property taxes altogether, for a certain amount of time in order to drive up the value of surrounding property, which in turn creates greater tax revenue for the city.
 

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What is a TIF? “TIF” stands for “Tax Increment Financing,” a special tool that the City of Chicago can use to generate money for economic development in a specific geographic area. TIF allows the City to re-invest all new property tax dollars in the neighborhood from which they came for a 23-year period. These “new” revenues – also called “increments” – arise if new development takes place in the TIF district, or if the value of existing properties rises, resulting in higher tax bills. These funds can be spent on public works projects or given as subsidies to encourage private development. But TIF also makes it much easier for the City to acquire private property and demolish buildings to make way for new construction.

chicago, does much more than just build public infrastructure with TIF dollars. here, initial TIF developers are often given HUGE subsidies to invest in down-trodden TIF districts and the hope is that the development will increase the value of nearby TIF district properties to the point where new increases in property tax revenue from within the TIF district will off-set the initial subsidy to the developer. it's a risky game, but it's worked shockingly well in chicago.
 

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You will note, I did not say TIF money was limited to building public infrastructure. While I did not give an exhaustive list, I did note the money can alo be used for things like site prep (demolition, environmental remediation, etc.). It can also be used for some historic rehab work (though there are other dedicated funding sources for that), relocating businesses, job training, studies/administrative services, and reimbusing developers for certain kinds of work.

TIFs are not used to relieve developers from paying property taxes altogether. Yes, they can be used as a subsidy, but they aren't tax freebies or tax reductions or anything like that.
 

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Markitect said:
You will note, I did not say TIF money was limited to building public infrastructure. While I did not give an exhaustive list, I did note the money can alo be used for things like site prep (demolition, environmental remediation, etc.). It can also be used for some historic rehab work (though there are other dedicated funding sources for that), relocating businesses, job training, studies/administrative services, and reimbusing developers for certain kinds of work.

TIFs are not used to relieve developers from paying property taxes altogether. Yes, they can be used as a subsidy, but they aren't tax freebies or tax reductions or anything like that.
Some people view TIFs as de facto tax freebies because the additional property tax revenue generated by the development goes to pay off the initial bonds either given to the developer or spent on public infrastructure, and doesn't go into schools, the general revenue stream, or whatever else a municipality collects tax money for.

I think TIFs are basically a backwards subsidy, that is, they offer financial incentive to the developer whilst indirectly taking money away from other expenditures.

But I'm all for TIFs, because the benefits of developing blighted property outweigh the costs associated with TIFs.

I do believe we have gotten way too leniant on defining "blight." In the Milwaukee metro, the heaviest users of TIFs are suburban communities who use them for cornfield sites. These are sites that would most likely be developed without the TIF, as they don't carry the same barriers to development that a previously-developed urban site does.

I know of a small town in Southwest Wisconsin that is using a TIF to build a Super WalMart. Come on now, as if the largest corporation in the world needs TIF help to build a store in a no-brainer location. Ridiculous.
 

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La Crosse has used several (11, I believe) TIF districts. They worked out pretty well to spur growth downtown and helped the city garner grants and loans to do streetscaping, rebuild the levy downtown, expand the civic cetner, develop a downtown transit center, and acquire land to the north of downtown for mixed-use.

Several projects in the TIF districts were/are the Market Square Ramp (parking ramp, retail, and apartments), CenturyTel Midwest headquarters, Logistics Health headquarters (renderings released today), most of the historic buildings refurbished, the new 4-5 story condo development, several other office projects, and several residential properties near the riverfront.

I did a google search for La Crosse TIF districts, and there is a PDF file on there that shows the district #10 proposal and explains how it works between the city, county, and redevelopment authority.
 

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Yes. The small town that is using the TIF is Platteville, since I am going to school here. And I remember a big debate that was goin on here about it, but then the Common Council didn't even bother to listen to the side that was against it or wnated more studies to be done. Anyways, the TIF is being used for more then just the Super Walmart. There is additional retail being planned with this, mainly strip mall type retail, a subdivision, forgot how many lots, and condos/apartments are being added. So the TIF is being used for more then just Walmart, but to have it included I think is pretty much not necessary.
 

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benscrape said:
Yes. The small town that is using the TIF is Platteville, since I am going to school here. And I remember a big debate that was goin on here about it, but then the Common Council didn't even bother to listen to the side that was against it or wnated more studies to be done. Anyways, the TIF is being used for more then just the Super Walmart. There is additional retail being planned with this, mainly strip mall type retail, a subdivision, forgot how many lots, and condos/apartments are being added. So the TIF is being used for more then just Walmart, but to have it included I think is pretty much not necessary.
I haven't heard about the Platteville TIF. I was actually referring to Dodgeville, which annexed a large chunk of open farmland and created a TIF. They've built their streets and are looking to use TIF funds to assist Wal Mart in building their super store.

This to me is an example of a stupid TIF for two reasons: First, the TIF law in Wisco, and the TIF laws in most other states that have them, were enacted to spur development in blighted areas, where "if not but for" the TIF there would be no development. We seem to have completely forgotten the "if not but for" piece altogether. If this Dodgeville TIF did not exist, development would still occur. It's a growing community that is becoming more and more a bedroom community of Madison. Wal Mart would build there with or without the TIF.

Second, in a small town like Dodgeville (pop 5,000), if you have such a significant chunk of the city under a TIF, then you have a significant percentage of tax revenues not going to schools, public works, etc. There are small towns in SE Wisconsin that have so much territory under a TIF, something like 30% of the tax revenues they collect go to the TIF, and not to other things they need to pay for.

The problem is that TIFs are so complicated, half the time the mayors and council members in these smaller communities don't even understand their ramifications. If the elected leaders don't understand them, how can you expect the citizenry to make informed decisions about them?
 

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I stand correct myself. The Platteville TIF is being deiscussed actually. I didn't know that Dodgeville also was using a TIF for a Super Walmart. I have to agree that the councils and mayors here and in many other places don't think about the ramifications of using them. Because alot of the tax dollars due go to repaying the TIF instead of going to schools or other departments. But at the same time, you know the city and even the developer or the company wanting to build is not always going to use their own money to develop. They may pay for some, but not all.

After talking with some planners and developers, TIF's is the only tool that cities in WIsconsin have to help development. Unfortunately, its in the suburbs being used to spawn development on open land. I know in my hometown of Oak Creek, a TIF is most likely being used for a major development on 27th Street.
 

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TurkPBR said:
La Crosse has used several (11, I believe) TIF districts. They worked out pretty well to spur growth downtown and helped the city garner grants and loans to do streetscaping, rebuild the levy downtown, expand the civic cetner, develop a downtown transit center, and acquire land to the north of downtown for mixed-use.

Several projects in the TIF districts were/are the Market Square Ramp (parking ramp, retail, and apartments), CenturyTel Midwest headquarters, Logistics Health headquarters (renderings released today), most of the historic buildings refurbished, the new 4-5 story condo development, several other office projects, and several residential properties near the riverfront.

I did a google search for La Crosse TIF districts, and there is a PDF file on there that shows the district #10 proposal and explains how it works between the city, county, and redevelopment authority.

We have a LaCrosse rep? Sweet. Get a LaCrosse thread going. Please?
 
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