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Wednesday, May 25, 2011

Janesville Cashes In TIF Surplus Cache To Help Balance Walker's Cuts

In a move not likely to have happened before Scott Walker's budget proposal to cut Janesville’s portion of state shared revenue by 23 percent, the Janesville city council voted unanimously to approve terminating a TIF District ten years earlier than required by law. A total of $1.67 million is expected to be distributed to cash-strapped local jurisdictions within the next 30 days.

JG Excerpt:
The city has a policy of dissolving TIF districts as soon as the bills are paid, “and we waited a little big longer on this one because, quite frankly, it is a hot area and there is still land to be sold,” Grassman said.

It's no secret that Janesville administrators are very fond of enticing well-heeled local developers with tax revenue capital from these legalized slush funds, but to now use the excess money to help plug budget holes created in part by state aid shortfalls to local jurisdictions including the school district is unheard of around here, but a natural response to Walker's budget proposal. I applaud this decision by the city council.

Unfortunately, this also works right into Walker's hands of centralized government. While Walker's budget cuts over $800 million from education and plumps his centralized economic development corporation with $250 million in state tax revenue, Wisconsin communities are making up for the state aid shortfall by shifting local economic development money back into education. This of course will leave communities without the capital resources to seed economic growth.

Knowing Walker's apparent lust for power, I'm also surprised he hasn't demanded all municipal TIF surplus capital throughout Wisconsin be turned over to fill the treasury of his new economic development corporation, or to at least call a moratorium on early TIF terminations. That might be his next move.

But what Janesville did could be the start of an interesting trend to watch for and follow. If other communities start cashing in TIF surplus usually destined for economic development to make up for Walker-induced state aid shortfalls, Walker eventually will be the only authority in town for developers.

Perhaps that is exactly how he wants it.

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