By Jacob Mathias
A resolution for a 10-year extension and distressed designation of tax increment district #1 in the Village of Whiting was unanimously approved Thursday morning at a meeting of the village’s Joint Review Board.
TID #1 was formed in 1994 with a projected income of over $4.5 million. When the Whiting paper mill closed in 2011, that income was drastically reduced.
“Especially with the Whiting mill closure, there wasn’t a way within the time frame that was set originally for the TID to achieve the financial goals,” said Portage County Executive Patty Dreier. “They had made some improvements under the TID under this time period, truck routes mostly, but also the village well.”
According to projections by AECOM, an infrastructure engineering firm, by extending the TID another 10 years, the tax increment income increases from $1,634,139 to $1,876,759. The total cost of projects the TID is supposed to finance is $2,021,001 leaving a balance of $144,242.
“If we don’t have any economic development in the area to offset those costs related to past projects, we are going to have to pass that on to the residents,” said Village President Paul Stroik. “We have 10 years so I’m optimistic that in 10 years we’ll get some type of development there.”
Tax increment districts allow municipalities to subsidize current improvement projects using projected future tax gains from those improvements. By extending the TID in Whiting, more of those gains can be used to cut the TID’s current losses.
“It was something that was necessary to be done as a result of the mill closing,” said Kurt Glenzer of the village plan commission. “In order to make up some of that this was a necessary step in trying to save the tax payers something.”
“It was to extend for 10 years then to have a chance to mitigate the losses but also give an opportunity for additional time to it. It wasn’t going to hurt anything to do that,” said Dreier.
“It wasn’t Whiting’s fault that this happened in my view. It was our recession and changes in the paper industry and other impacts,” said Dreier.
According to the Wisconsin Department of Revenue, once a distressed TID is amended, they fall under new restrictions including:
- Make any additional expenditures after the original expenditure period ends
- Amend the project plan to add any new costs, any new territory or become a donor TID
- Become part of a TID with overlapping boundaries
- Spend any funds outside its boundaries
“But the bottom line is this becomes just a waiting period to try to gather as much increment as we can so the village has less to make whole at the end,” said Dreier.
The application for the TID extension next goes to the state level for approval.