Tax Increment Districts (TIDs) are valuable economic development tools for communities. Let me explain how TIDs work and how Sheboygan Falls is using this tool responsibly.

Tax Increment Districts promote economic development by using the property tax increment from all of the taxing entities: city, school district, county, and technical college. Before a district is created all of these taxing entities hold a Joint Review Board meeting to review the proposed TID. After all of their questions are answered, a vote is taken to approve the district. You need to have something new building to generate funds.

Funds generated from the new development in the district are used to pay for road, infrastructure and development incentives within the approved TID.

One of the key tests in getting a district approved is the “but for” test. Would the new development occur “but for” the TID. The city must show the Joint Review Board that it is necessary to use the generated funds to provide roads, water lines, sewer, storm water ponds, or incentives for the development to occur.

Here is a simple explanation of how it works in Sheboygan Falls. With rounding, the tax rates per thousand are: city $6, school district $10, county $5, and tech school $1 for a total of $22 per thousand. If $10,000,000 of new value is built in the district, there would be $220,000 of funds generated annually. This $220,000 is used to fund the roads, infrastructure and incentives, which made the $10,000,000 of new buildings possible. The city does not start investing money in the TID until it knows there will be enough increment generated to cover the cost of improvements.

Tax Increment Districts are in place in all 50 states. There are 1,200 TIDs in place in Wisconsin. The City of Sheboygan Falls has two TIDs right now, TID #3 and TID #4.

Tid #3 is by County Road C and TT and includes Bemis Mfg., Morrelle warehouses, and Vision Business Park, and the recently created TID #4 is around the Plankview Green area. TID #3 extended infrastructure to help Bemis build, and make subdivisions in that area possible by bringing water and sewer out that way. Metallic Tube is building right now because of TID #3. TID #4 helped bring Kwik Trip to the city, will make more development in that area possible by extending roads and infrastructure, and should have sufficient funds to rebuild Bluebird Lane.

Once all development expenses are paid for the TID closes and the newly created property value comes on to the tax roll.

A few people have speculated that we are over using TID in Sheboygan Falls. This is definitely not true. We are simply remaining competitive with our neighbors. Right now Plymouth has 15% of assessed value in TID; Oostburg will have over 15% of assessed value in TID, after receiving special legislation for Master’s Gallery, and Sheboygan is buying land and creating more TIDs. Sheboygan Falls is currently at 3.5% of assessed value in TID. So, as you can see we are and will continue to use this economic development tool responsibly.