[Winona Online Democracy]
Norbert and WOD
You can be sure that the TIF "but for" test has been stretched to the limit by many other cities - to the extent that the test is in the Statute in name only. Due to those excesses, the Legislature has been increnentally reining the use of TIF.
In addition, the Legislature adopted a new twist to tax payer development financing termed Economic Development Tax Abatement a few session ago. The word "abatement" is a misnomer in this case. In effect, this Statute provides some of the same advantages to the cities as TIF (and more flexibility as to the application of increments), but it also limits the amount of increment that can be "diverted", and gives the counties and schools a choice as to whether to "play" rather than the "gotcha" by the cities that TIF lays on those other taxing entities.
Of course, the problem might be that the limits placed on Economic Development Tax Abatement would probably result in insufficient annual increments to pay the debt service on a $6 million bond issue with the city increment alone (capped at $200K or 5% of levy). But, since each taxing entity has the $200K annual cap, the city could perhaps coax some out of the county and school district as well to service the $6 million debt.
While another advantage of Tax Abatement financing is the ability to collect even on vacant land that appreciates in value, one still needs the increments to service the bond debt - and that requires something else to happen on the development scene (be it TIF or Tax Abatement) . Norbert's question in that regard appears valid if the Commercial Harbor is, in fact, the TIF District from which increments are to flow. Since TIF is geographically specific (the increments must be spent in the same geographic area from which they are collected), this could be a problem. On the other hand Tax Abatement is not geographically specific. One can colllect it from one area and spend it in another.
Class dismissed. Check with your bond counsel, or municipal financial advisor for clarification and validitiy of these comments.
Chuck Dillerud
Champlin
-------------- Original message --------------
> [Winona Online Democracy]
>
> Thanks, all. And I found some information on a legislature site.
>
> I was wondering because a brief news item mentioned a "Pelzer area"
> TIF district. Now I think that refers to the barge harbor rather than
> the property in the Hwy 14 and Pelzer vicinity.
>
> There is a "but-for" condition that has to be met which means that the
> increased economic activity wouldn't have happend "but for" the project.
> It seems a stretch to claim that more trucks will come to our harbor
> if the bridge is built. Maybe they have the choice to use LaCrosse.
>
> J. Finn
>
>
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