Two state lawmakers are cranking the motor on a $30 million Ripon development that stalled when the city failed to get approval for a tax-incremental financing district.
And if that project gets rolling again, it could clear the way for a softening of the state’s TIF law.
“It would be nice if there was a way to deal with waivers or the (state) Department of Revenue directly (rather) than having to ask legislators for help,” said Ripon Mayor Aaron Kramer. “I’m not an advocate of legislation specifically dealing with one community.”
But Ripon could benefit from that kind of legislation after state Rep. Joan Ballweg, R-Markesan, and state Sen. Luther Olsen, R-Ripon, drafted a bill pushing the state to reconsider the creation of a new TIF district in the city.
TIF districts let municipalities borrow money to subsidize developments and pay for infrastructure that serves projects. Communities then need new taxes generated by projects to pay off the debt.
Ripon last year spent roughly nine months planning for its eighth TIF district, which was created in part to help Ripon-based Boca Grande Capital LLC develop a $30 million hotel and spa.
But Kramer said the tax base for the district changed after the city sent its proposal to the DOR, prompting an agency report that showed an assessed value in the district of more than 12 percent of the total equalized value of taxable property in the city.
“It was like 12.1 percent — barely over,” he said.
But that was enough for the DOR to reject the district. State law caps new TIF districts at 12 percent.
So city leaders turned to Ballweg and Olsen. Ballweg’s bill would require the DOR to judge the Ripon district based on tax assessment numbers before the change in the district’s tax base. The bill was introduced and referred last week to the Assembly Committee on Urban and Local Affairs.
It’s not the first time lawmakers have been called to action to help a TIF district. State Rep. Robin Vos, R-Racine, said he proposed a bill to solve a similar problem in Union Grove. He said when he was a member of the Legislature’s Committee on Ways and Means, he reviewed similar bills for Beloit and Chippewa Falls.
“I am in favor of giving DOR a little more flexibility in judging these cases,” Vos said. “Creating a TIF takes time, and assessments can change in six months. If the original engineering report said the district was under 12 percent, that should be enough.”
But for now, it is not enough, and state Rep. Terese Berceau, D-Madison, said she is tired of handling these bills case by case.
“I don’t think we should have to have bills like this, especially when there are other priorities we have to look at as a state,” she said. “It’s a small problem right now, but it keeps happening.”
The problem for the Legislature likely will be figuring out how to prevent the bills from bubbling up. Vos said he wants a solution but opposes raising the 12 percent cap because that could cost taxpayers more money.
Berceau, meanwhile, said letting the DOR hand out waivers to cities that go over 12 percent is a bad idea.
“You start handing out automatic waivers, and everyone’s going to go over the cap,” she said.
In Ripon, Kramer said the city no longer even needs the bill.
To secure the Boca Grande development, the city must have a TIF district by Sept. 30. Unsure of whether Ballweg’s bill would make it to Gov. Jim Doyle’s desk by then, Kramer said, the city redrew the district boundaries and removed a few properties to bring the area below 12 percent.
If the governor signs Ballweg’s bill, Kramer said, the city will withdraw the TIF district the law creates.
Nevertheless, the seeds are sewn for further discussion in the Capitol. Berceau said she will discuss revising TIF district rules at the next Urban and Local Affairs meeting.
“Individual bills get good debate at committee level, but they never take floor time in the Assembly,” she said. “I think it’s time for a broader discussion. Is this the way we want to deal with this?”