Friday, December 8, 2017

Can Wisconsin Give Cash 2 Developers on TIF Projects?

The Wisconsin Institute for Law and Liberty filed lawsuit on an economic development project in Eau Claire that contributed cash payments to a developing organization. Wisconsin's Tax Incremental Financing (TIF) Law was enacted in 1975.

TIF districts are commercial- residential areas designated by the municipality as undevelopable without some form of public assistance.  The municipality issues bonds to pay for the infrastructure or a portion of the development.  The bonds are expected to be repaid over a defined number of years with property taxes generated by the increased value of the property.

This lawsuit seeks to eliminate the practice of making cash payments to developers.  The litigation seeks to categorize the cash payments to developers as illegal property tax rebates for property owners.  This violates the Wisconsin Constitution's requirement that property taxes be assessed in a uniform manner - called the uniformity clause.

The result of this lawsuit could have implications on the legality of the Foxconn process now in motion.


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