Kudos to the Wisconsin State Journal for doing actual “research reporting” for TIF: A High Stakes Game. Staff reporter Dean Mosiman writes a solid overview of how the City of Madison is utilizing Tax Incremental Financing (TIF) to shape the building boom in Capital City. More interestingly, the piece demonstrates how the “New Urbanist” political ideology of Mayor Cieslewicz is guiding the use of this powerful tool. A central tenet of faith in New Urbanist thinking is that urban sprawl is bad, therefore, high density mixed use residential areas served by light rail is good.
“These days, as developers make bigger requests, the buzzwords are mixed-use, jobs, parking, lower-cost housing, and transportation - the latter meaning streetcars to the mayor.” … “The mayor, concerned that TIF is inadvertently inflating land prices, wants to strengthen policy against covering excessive property costs. And he wants to use TIF for groceries and to invest in streetcars instead of costly underground parking.”The Wisconsin TIF Program was established to help municipal governments stimulate development in blighted or underdeveloped areas that would not otherwise occur. TIF Details (PDF File) covers the nuts and bolts of the program. The key trick is establishing a base tax rate in a specified area, and for as long as an approved project is underway in that area, any tax revenue above base values goes to pay for the project. Once the project is paid off, the city, in theory, benefits from a higher property tax base.
The TIF program was never conceived as a way to build an idealized city, but when the State rules changed to allow for “mixed use” developments, it opened the door to “model building.” Mayor Dave is an adherent of the Center On Wisconsin Strategy (COWS) and works closely with both Joel Rogers and Matthew Mayrl on policy decisions. Mayrl highlights COWS concerns that business will leave the City for open spaces as evidenced in Epic's Relocation out of Madison, and the COWS are proposing reforms the TIF program to re-focus the projects back into urban centers.
COWS: TIF Reform: “TIF underwent a major overhaul during the 2003–04 legislative session that amended TIF statutes to loosen the rules for which projects are eligible for TIF funding, authorizing TIF funding for “mixed-use” developments for the first time. … By treating all projects equally, TIF has cut urban areas’ ability to use TIF as an effective development incentive in addressing blight and decayed infrastructure. Urban redevelopment projects are treated no differently than retail developments, and, just as blighted areas receive little attention under traditional market incentives, they continue to be ignored under TIF.”The Cieslewicz administration in the meantime is using the tools at hand to lock Madison into long term TIF projects which have a goal of crowding the center of the city with condo’s and little shops which can be serviced by little trolleys. The State limits the dollar amount of TIF projects a municipality can create so the more the Cieslewicz administration grants high dollar projects for “philosophical reasons”, the less flexibility future administrations will have for other needs.
