County considers resolution to pose TIF district questions

By Kevin O’Brien

The next time a city or village in Marathon County wants to create a new tax-incremental financing (TIF) district, it may be asked to answer a set of 10 questions first.

A proposed resolution on its way to the county board directs the person tasked with representing the county in TIF deliberations to put forth questions to determine whether the proposal measures up to standards set by the Wisconsin Department of Revenue. The resolution was endorsed last Thursday by the Education, Extension and Economic Development Committee (EEEDC).

TIF districts are designated areas within a municipality where the property taxes generated by any new developments are used to pay for local infrastructure improvements and other economic incentives instead of being shared with the county, school district and technical schools. Marathon County currently has 40 active TIF districts (also called TIDs), with a combined total of over a $1 billion in property value that is essentially offlimits to traditional taxation.

For the past several years, the county has been considering ways of reining in some of the extensive time extensions that are granted to underperforming TIF districts and making sure that any new TIDs will actually benefit county taxpayers in the long run. Before a TIF district can be established or amended, it must be approved by what’s called a Joint Review Board (JRB), which consists of a representative from the county and one person each from the other taxing jurisdictions being asked to forfeit revenue over the life of the district.

Finance director Sam Fenzke currently represents the county on all JRBs, as did her predecessor.

Peter Weinschenk, former editor of the Record-Review, drafted the original version of the resolution that initially went before the EEEDC in December before returning last Thursday. Speaking during public comment, Weinschenk said his proposal was based on the work of a task force formed by the county in 2023 to look at the impact of TIDs on county finances and recommend changes to how TIF proposals are evaluated.

“This proposal in no way restricts any city, village or urban township in Marathon County from using TIF to the full extent of state law,” he said. “It does attempt to improve this county’s TIF process and culture by slowing TID approval at the Joint Review Board.”

Weinschenk said his proposal, if adopted, would encourage better conversations at JRB meetings and make sure taxpayers are getting a return on their investment for the taxes diverted to development projects.

According to Weinschenk, county taxpayers paid over $28 million for TIDs in 2023, which equates to $312 extra for the owner of an average-priced home ($193,007). This is “not an insignificant sum,” he said, noting that it amounts to half of what the average taxpayer pays for all county services and nearly 10 percent of their total property bill.

Not all of this investment results in better economic outcomes, he noted.

“A third of county TIDs have had to be extended due to poor performance,” he said. “We can do better.”

Before the committee could vote on Weinschenk’s resolution, the vice-chair presented his own alternative. Supervisor Randy Fifrick rewrote four “whereas” clauses to remove some of Weinschenk’s financial calculations and focus more on the benefits of TIF districts, while still acknowledging that extending the lifespan of underperforming TIDS “harms both the county government and the property taxpayers.”

“In reviewing a lot of the whereases, I didn’t like the negative tone and what I feel is a lot of opinion included in the original draft,” he said.

Fifrick also rewrote a paragraph to make it clear that the county’s representative will not support a TIF district with a termination date later than 38 years after it was created. The resolution had previously stated that the termination date “would equate to a repayment to taxpayers of their TID investment.”

“I couldn’t support the last resolution based on the whereases, and just a lot of the numbers in there I couldn’t come up with myself in working through it,” he said. “I think this does a better job of simply laying out the numbers, the facts of how many districts we have, the value, and lifespan.”

Fifrick’s substitute resolution passed unanimously and will now go on to the full board for a vote.

The questions

The following questions, based on standards set by the Wisconsin Department of Revenue, would be asked before any new TIF district is created in Marathon County:

■ Would the expected development occur without (“but for”) the use of TIF? Would the development occur if the project was scaled back or the timeframe pushed out?

■ Will the development’s economic benefits, measured by increased employment, business and personal income and property value, compensate for the cost of the improvements?

■ Do the benefits outweigh the taxes residents of overlying districts are expected to pay?

■ How does the planned development fit into the overall economic picture in the district and the county? How does the development fit with other development in the district? Will the potential businesses benefit the district and the county in the long term? How many and what type of jobs will this create?

■ How does the TID benefit taxpayers in the district and the county? Is the total expenditure for eligible project costs feasible?

■ Is there a better use for the development site, the tax revenue and the limited TIF capacity?

■ What is the general opinion of my district’s residents and the county residents on this TID?

■ How will the planned development affect the demand for services in my district and the county?

■ Is the developer receiving a subsidy, such as a cash grant or forgivable loan? If so, how was the need and benefit analyzed? Is there a written developer’s agreement?

■ What guarantees are in place to ensure the development will occur as anticipated and the property value will increase as expected?

Peter Weinschenk