Janesville City Council dissolves two TIFs
What is TIF?
Tax incremental financing is a tool for governments to attract private investment. It allows municipalities to acquire property, eliminate dilapidated buildings and make improvements such as sewer, water and streets and charge the cost to a TIF district.
The municipality then offers sites in the district to businesses for free or at great discounts to draw development. As the district's property value rises because of the new investment, the increases in property taxes are used to repay the municipality's costs. When the costs are paid or the district's life expires, the new property taxes are distributed among all taxing jurisdictions, such as school districts and the county.
During the life of a TIF, taxing districts such as schools receive the same property taxes they did before the new investment raised the property value.
JANESVILLE — The Janesville City Council on Monday dissolved two tax incremental finance districts at its Monday meeting, one of which will return excess money to taxing jurisdictions.
TIF districts must be dissolved when all project costs are recovered or no later than 27 years after their creation.
The council dissolved the 28-acre TIF No. 15, which was created in 1995 for the expansion of Freedom Plastics on Arch Street, and the 25-acre TIF No. 7, created in 1992 for Swing N' Slide on Barberry Drive.
TIF No. 15 was created with a base value of $1.69 million and now has a value of $5.51 million. Over the life of the TIF, the city invested $372,808 in TIF No. 15.
The district will be dissolved with a positive fund balance of $367,600 because taxes are levied annually and the TIF generated surplus money after expenses were paid. The money will be returned to the taxing jurisdictions in the proportion that they contributed:
-- Rock County: $91,904
-- Janesville School District: $143,702
-- Blackhawk Technical College: $26,280
-- City of Janesville: $92,675
-- Janesville Public Library: $13,039.
In 2006, the council approved a $50,000 development loan to help Freedom Plastics build an employee training center. Debt service payments were forgivable if Freedom Plastics maintained 150 or more workers over the life of the loan.
In 2008, the company was hit by high petroleum costs and the rapid decline in residential construction and was sold to two plastics products producers. At the time of the sale, $42,946 of the $50,000 was repaid to the city and added to the funds in TIF No. 15. The other $7,053 was forgiven because the company had met its employment commitments for the first 18 months of the loan.
TIF No. 7 was created with a base value of $1.83 million and now has a value of $3.78 million. Over the life of the TIF, the city invested $225,581 in TIF No. 7 in land development, street improvements and administrative costs.
TIF No. 7 was twice amended to share positive tax increments of $551,169 with TIF No. 3, a downtown TIF district.
The city will not return funds to participating taxing jurisdictions because there are none remaining.
Janesville has created a total of 34 TIFs, including one of which was approved Monday night for the Southern Wisconsin Regional Airport.
The city has dissolved 15 TIFs.
May 13, 2009 at 10:19 a.m.
Suggest removal
Yes. "The money will be returned to the taxing jurisdictions in the proportion that they contributed:"
.
The $143K, by the way, has no relationship to the actual tax credit, it's just the money left over in the account, so to speak. Since the school district taxes are the bulk of the property tax, they get the lion's share of the account balance.
May 12, 2009 at 9:12 p.m.
Suggest removal
Does this mean that the school district will get back $143,00?
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