Looking on the Bright Side
TIF, TID and ACT 234.
Too late. But what the hell. For many years’ citizens have complained about Lake Geneva’s misuse of Tax Increment Financing (TIF) funds, but did it do any good? Has it changed anything? Well, although it is now too late to correct the financial dealings of Lake Geneva’s Tax Increment District #4 (TID #4), the complaints lodged against the misuse of TIF funds have had an effect.
The State of Wisconsin has responded to the misuse by rewriting TIF laws in 2015 with the intent of eliminating the misuses for which the City of Lake Geneva has become the State’s notorious poster child. Hooray, for Act 234 which amends TIF laws and establishes better accountability, reporting and visibility of all TIF transactions. The bill requires a standing Joint Review Board (JRB) in order to create a TID and the standing JRB must remain in existence while the TID exists. The JRB must meet annually to review the annual report and the performance and status of the TID. The annual report (subject to fines if not done) must be sent to each overlying taxing jurisdiction as well as the Department of Revenue (DOR), by July 1, annually. The copy of the annual report filed with DOR must be in an electronic format as specified by the DOR and it shall be posted on the DOR website.
The annual report must contain at least all of the following information:
- The name assigned to the TID.
- The classification of the TID that is included in the project plan and the scope of the project.
- The name of any developer who is named in a developer’s agreement who receives any financial assistance from tax increments allocated for the TID.
- The date that the city expects the TID to terminate.
- The amount of tax increments to be deposited into a special fund for that TID.
An analysis of the special fund for the TID that includes all of the following:
- The balance in the special fund at the beginning of the fiscal year
- All amounts deposited in the special fund by source, including amounts received from another TID.
- An itemized list of all expenditures from the special fund by category of permissible project costs.
- The balance in the special fund at the end of the fiscal year, including a breakdown of that balance by source and a breakdown of that balance identifying any portion of the balance that is required, pledged, earmarked, or otherwise designated for payment of or securing of obligations and anticipated project costs. Any portion of such ending balance that has not been identified or is not identified as being required, pledged, earmarked, or otherwise designated for payment of or securing of obligations or anticipated project costs shall be designated as surplus.
- The contact information of the person designated by the political subdivision to respond to questions or concerns regarding the annual report.
The success of Act 234 at reforming TIF and eliminating misuse (polite word for corruption) is in the insistence/enforcement by the Joint Review Board and the Department of Revenue and their ability to assure that all expenditures are actually permissible costs. Act 234 is a step in the right direction that validates our efforts and hopefully eliminates the previous financial thievery from future TIF funds.