Many real estate and economic development groups have been working tirelessly to advocate for the improvement and expansion of TIF. In doing so, the coalition has collected a number of important facts and figures to continue making the economic development case to stakeholders and legislators as our advocacy efforts continue. They have developed a useful brochure which you may download or forward when discussing TIF.
Tax incremental financing (TIF) is a method of financing that generates tax revenue to be used toward funding infrastructure and development. TIF is the most effective tool Wisconsin cities and villages have to spur economic development and job creation. Municipalities have been using TIF successfully since 1975.
The TIF process allows a municipality to pay for public improvements and other eligible costs within a designated area, called a tax incremental district (TID), using the future taxes collected on the TID’s increased property value to repay the cost of the improvements. The rationale behind TIF is that public investment will promote private development, jobs and tax base growth that would not otherwise occur absent the TID.
Wisconsin TIF Success
• As of August 2015, there were 1,128 active TIDs in Wisconsin. Since inception, these TIDs have generated a combined increment, which is growth in property value, of over $16 billion or $14.4 million per TID, with the average TID age being 11.93 years.
• The average TID active in 2015 added $1.2 million to the tax base per year since its creation. This figure represents a tax base generated within TIDs and does not account for increases in value in neighboring areas occurring because of the TID growth.
• Growth occurs at a faster rate in TIDs. From August 2014 to August 2015, the total equalized value of all active TIDs increased by 6.42 percent. In comparison, state equalized value as a whole increased in value by only 2.42 percent.
• The majority of TIDs have sufficient increment to pay off their project costs. Of the 1,128 TIDs in 2015, only 5.5 percent were distressed and less than 1 percent were severely distressed. Only 5.4 percent of TIDs in 2015 were decrement TIDs, which are valued at less than 90 percent of the TID’s base value in 2014 and in 2015.
• In 2015, 30 TIDs were terminated after generating $445 million in incremental value during their lifetimes. The numbers for 2014 are very similar: the 31 TIDs terminated that year created a combined $485 million in increment.
• Since 2000, 447 TIDs have been terminated in Wisconsin, adding nearly $9 billion of new value to the tax base.
Click HERE for the final brochure copy. Call the Association office if you’d like a hard copy of the material.