The Milwaukee Milwaukee Association of Commerce (aka “local business leaders) set up its own task force last year to figure out how to pay for a new Milwaukee Bucks arena without having to, you know, ask the Milwaukee Bucks for the money, and the latest they’ve come up with is a “super TIF.” The Milwaukee Journal Sentinel is a bit hazy on the details, but this apparently would involve not just kicking back increased property taxes in an arena district, like in a regular TIF (aka tax increment financing, aka “the financing method most likely to completely blow up in your face if tax receipts go down and not up”), but sales taxes and state income taxes as well, over a large geographical area.
While on the face of it this may seem like a great idea — if we need a lot of money, let’s build a bigger TIF! — this goes against the logic (using that term loosely here) of TIFs, which are designed to capture the increased economic activity from specific projects. Recall that Louisville actually shrunk its TIF district last September in order to bring in money, because it had drawn its circle so broadly that it was having to figure in all the other areas of downtown that were losing spending to the arena district, whereas a smaller TIF area can pretend that any arena spending is new money, and to hell with the effect on the region as a whole.
Looking on the bright side (using that term loosely here), a supersized TIF in Milwaukee involving property, sales, and income taxes is likely to generate a bunch of money, if only because those tax revenues tend to go up over time regardless. (Yes, Milwaukee is growing. Slowly. Plus there’s inflation regardless.) On the less bright side, this would mean crediting the Bucks for economic activity they had nothing to do with, and giving them the proceeds instead of using it to, oh, I dunno, pay for the increased cost of future city services.
MMAC president Timothy Sheehy told the Journal Sentinel that “such TIFs had worked in other markets,” but reporter Don Walker (who you may remember from this fine piece of journalism) apparently didn’t think to ask him for actual examples. Walker did cite developer Hammes Co.’s involvement with a TIF-financed minor-league hockey arena project in Allentown, Pennsylvania, which doesn’t open until September, but is already massively over budget. That’s a funny definition of “worked,” but I guess that’s why Chamber of Commerce presidents get paid the big bucks.