By Al Stanek
Whitewater Banner volunteer staff
whitewaterbanner@gmail.com
March 18, 2021
The Whitewater Common Council on March 16th passed resolutions closing out five Tax Incremental Districts (TIDs) which is expected to generate unanticipated revenue for the City of Whitewater and the Whitewater Unified School District (WWUSD) along with other units of government.
Just over $100,000 of remaining TID balances are expected to be refunded to the City, WWUSD, Walworth and Jefferson Counties and two technical colleges that levy property taxes in different parts of the city. An additional estimated $607,000 refund is also likely to be distributed among the governmental units when a sixth TID is expected to be closed later this year.
The WI Department of Revenue (DOR) defines a TID as part of an economic development strategy that allows a municipality to fund infrastructure and other improvements with the property tax revenue generated by new development. As property values rise within a TID the city uses the property tax paid on that development to pay for infrastructure and development projects within the TID’s borders.
Whitewater has created six TIDs over a 20 plus year period. The City plans to close all six by year’s end which will allow the use of that tool for future development. When a TID is closed any remaining dollars in its accounts are to be returned to participating units of government after a complete audit. The city, school district, county(s), and technical college(s) are then able to levy taxes on the value of TID improvements in future years.
The combination of refunded TID balances and the fact all taxing authorities will be adding significant equalized value to their tax base in coming years could result in a more favorable tax climate for residents and businesses who pay property taxes that are administered through the City of Whitewater and distributed to the other taxing units.
City Finance Director Steve Hatton estimated that returning the equalized values within the initial five TID closings would add over $4 million dollars to the tax rolls. Closing of the sixth TID later this year is expected to add over $92 million. A state authorized mechanism allows for a special “extension” of a TID which the Common Council adopted for this sixth TID at the March 16 meeting.
State law allows municipalities to extend the collection of TID revenue for one year after closing for several initiatives that are expected to provide value for area residents. The only option that applies in this case is a mechanism to encourage what the DOR refers to as “affordable housing” according to Greg Johnson of Ehlers and Associates, the City’s financial advisor.
Johnson explained that beyond a state requirement that defines affordable housing as housing that costs “no more than 30% of the household’s gross monthly income” the City can further define the projects funded through the program. The state requires that at least 75% of the funds must be used for “affordable housing” and the remaining can be used “to improve housing stock.”
Johnson provided Common Council members with examples of how other Wisconsin cities have taken advantage of the so-called “affordable housing” option. They included new home development, 10-year zero percent loans for property improvements by landlords and homeowners, neighborhood revitalization efforts, historical preservation grants and other programs based on an individual community’s goals. The City has scheduled information sessions with the other taxing districts in advance of the planned extension. Attracting more families to live in Whitewater is expected to benefit both the city and the school district.
Several other related issues were discussed and/or actions were taken. The council authorized accepting an $859,000 Community Development grant to be used to partially fund the construction of a new west side water tower and discussed the required reassessment of City properties based on the sales of nearby similar properties.
City Manager Cameron Clapper commented on concerns voiced by city residents over letters indicating changes in property assessments. He pointed out that a property’s assessed value is only one part of the formula that determines a homeowner’s tax bill. The tax rates set by each of the various taxing jurisdictions are increased or decreased based on any increase or decrease in the jurisdiction’s projected budget but also by any increase or decrease in the total value of all the taxable property in the jurisdiction. Theoretically an increase of valuations across the board and the reintroduction of TID improvements to the tax base without considerable increases in jurisdiction budgets could have a positive impact on local taxpayers.
Clapper urged citizens who have concerns over their assessment to call 920 749-8098 or 800 770-3927 to speak with an assessor. They also have the option to appeal their assessment to the City’s Board of Review and can attend what is called “Open Book” sessions on March 22nd or March 23rd where recent sales that have affected their property’s value can be examined.
