The Wisconsin Legislature approved the Tax Incremental Financing Law in 1975 to provide ways for cities to promote tax base expansion by financing public improvements in certain areas.
TIF districts are aimed at eliminating blight, rehabilitating declining property values, and promoting industry. Some typical activities include:
- Acquisition and demolition of blighted properties in a downtown, construction of parking facilities and street improvements to implement a downtown redevelopment program.
- Extension of sewer, storm sewer, and water mains, construction of a new well or elevated water storage facility to serve new industries.
- Waterway and public park improvements.
Benefits from a TIF program may come in the form of increased employment, an improved business climate and elimination of unsafe or unsightly areas.
When a Tax Incremental Financing District (TIF) is created, the aggregate equalized value of taxable and certain city-owned property is established. This is called the Tax Incremental Base. All taxing entities receive their share of the annual taxes generated by the base throughout the life of the TIF.
The city then installs public improvements, development occurs and property values grow. Taxes paid on the increased value (growth) are called Tax Increments and are used to pay for public improvement projects undertaken by the city.
The county, school districts, and other taxing jurisdictions do not benefit from taxes collected on value increases in the district until project costs have been recovered. After that, the TIF is closed and the added value is included in the apportionment process and shared by all taxing jurisdictions.
All property acquired by the Redevelopment Authority (RDA) will be done in accordance with Wisconsin Statutes. The following briefly outlines the steps in acquisition:
Determination made by RDA that property is required for a project + Notification to the property owner
- Appraisal of the property
- Completion of a Relocation Plan if property is occupied
- Second appraisal of property at the option of the property owner
- Evaluation of all appraisals
- Conclusion of acquisition
When a property is acquired through the use eminent domain powers, occupants may be entitled to certain relocation benefits. Those benefits include:
- Moving payment. The RDA will compensate for moving personal property to a new location. You may choose the actual cost or a fixed payment to complete the move yourself.
- Replacement housing (business) payment. This payment is to compensate for the difference between the acquisition price of your property and the cost of purchasing or renting a comparable replacement.
- Business re-establishment payment. Businesses that are required to move may be entitled to reimbursement for expenses related to re-establishing in a new location. Qualifying expenses are listed in the statutes and are discussed with business owners.