TIF resolution sent back to committee

A resolution calling for Marathon County to ask more probing questions before signing off on tax-incremental financing (TIF) districts was tossed back to committee Tuesday after concerns were raised about the wording.

Before the resolution could reach an up-ordown vote, the county board voted 34-1 to refer it back to the Extension, Education and Economic Development Committee for further discussion. Tuesday’s action was taken without discussion, but the resolution did generate a fair amount of conversation at the board’s educational meeting on June 19.

Peter Weinschenk, former editor of the Record-Review, authored the original resolution, which directs the county’s representative to ask a series of 10 questions before voting to approve any new TIF district proposed by a city or village. However, at last week’s meeting, he urged the board to reject the resolution after it was partially rewritten by supervisor Randy Fifrick.

Weinschenk said his resolution had been “highjacked,” and that it no longer provided any leverage for the county to question TIF proposals in a meaningful way.

TIF districts are designated areas with 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 nearly $1.3 billion in property value that is essentially off-limits to normal taxation.

The county’s finance director, a position currently held by Sam Fenzke, has traditionally represented the county on Joint Review Boards (JRBs), which are composed of taxing jurisdictions that are asked to forfeit tax revenue on new developments. Weinschenk’s resolution would have instructed Fenzke to ask 10 questions taken from the Department of Revenue’s guidelines for JRB members to ensure that any new or expanded TIF district is really necessary for development to happen and whether it will produce results.

During the board’s discussion last week, supervisor Stacey Morache pointed out that Fenzke has already started using the questions in the resolution as guidance for recent JRB votes. She said Fenzke voted in favor of one proposal to add $8.5 million in project costs to a TIF district because, without those added expenditures, future growth would have been compromised. However, she voted against two other proposals because they did not meet the criteria in the resolution, Morache noted.

“She is using that to vote no,” she said. “It’s not just a rubber stamp for everything.”

Still, during his public comments last week, Weinschenk expressed concerns about the revised resolution no longer requiring the finance director to ask the 10 questions, but only asking her to “consider” them in her decision-making process. He also took issue with Fifrick removing a section that would require taxpayers to be “repaid” within 38 years of a TIF district forming.

Weinschenk said the use of TIF districts in Marathon County is “pretty much out of control,” allowing municipalities to use public tax dollars for private developments that don’t always materialize.

“They embrace poorly planned, risky projects to pay for past poorly planned, risky projects,” he said. “This mismanagement has consequences.”

Weinschenk said 10 percent of all property within the county is now located within a TIF district, and one-third of the county’s TIDs have had their lifespans extended because they failed to generate economic development within their original timeframe. Weinschenk said the average county taxpayer pays an additional $347 in taxes every year to make up for the revenue lost to TIF districts.

“County taxpayers must wait multiple decades to get any kind of return on their TIF investment,” he said. “Many times they get nothing.”

Fifrick, however, disputed Weinschenk’s characterization of TIF districts as “out of control.”

“I do think they need to be managed, but I don’t think by any means you can make a general statement like that,” he said.

TIF districts have been used effectively to spur growth that would not otherwise have have happened, he said, pointing to G3 Industries, M&J Marine and PAW Health Network in Kronenwetter as examples of developments “that created jobs and added regional services.”

Fifrick said the biggest risks of TIF districts fall on the municipalities that create them, while the county gets to reap the benefits of additional sales tax revenue. At the same time, as an overlaying tax jurisdiction that stands to lose out on new property tax revenue, Marathon County does need to ask tough questions, Fifrick said.

“TIDs need to be used carefully and with a watchful oversight,” he said. “I believe this resolution does a good job of setting this framework.”