Effort to create new development agency with local TID revenue dies

An effort in the state legislature to create a new Kenosha and Racine counties economic development agency funded by 1 percent of tax increment district revenue from TIDs in those counties will not be adopted, state Rep. Samantha Kerkman said Wednesday.

What killed it was a consensus of municipalities in those counties that the plan might jeopardize when TID debt could be paid off and in the worst of situations maybe even raise local property taxes.

The new agency was seen as a way to bring national and international business to the area. It is widely thought the building of a massive plant in Racine County by electronic manufacturer Foxconn will bring other suppliers to the area. The new agency would get its funding from collecting 1 percent of annual TID revenue.

Kenosha County Executive Jim Kreuser brought county municipalities together Feb. 1 to discuss the proposal. Kreuser, a former state legislator, said he wanted to gather opinions from the municipalities, knowing that the end of the legislative session was near and measures sometimes are passed quickly at that time.

The local municipalities — including Paddock Lake, Twin Lakes,  Salem Lakes and Bristol from Western Kenosha County — objected, saying the drain off of the revenue would cause more potential problems than the new agency might bring in benefit.

“There was a consensus that they didn’t like the idea,” Kreuser said.

In a TID, tax revenues from all taxing bodies in a designated area are diverted to pay for improvements such as infrastructure designed to spur development. After a set period of time, the tax revenues return to the other taxing bodies.

The diversion of the 1 percent of revenue could extend the payoff period for the TIDs and possibly raise local property taxes, a letter from seven Kenosha County municipalities to the local state legislative contingent said. The letter, drafted by the city of Kenosha and signed by representatives of the governments of Paddock Lake, Twin Lakes,  Salem Lakes, Bristol, Kenosha, Somers and Pleasant Prairie, said in part:

… this proposed 1% allocation was never planned for and/or analyzed. Each TID is set up to service a specific debt load. Allocating 1% to a new activity may have the result of causing a shortfall in debt service. That shortfall would require funding by increasing the local tax levy resulting in a tax increase for our residents. Some TIDs are scheduled to close out and allow the incremental value created to begin funding the overlaying tax districts instead of being dedicated to debt service. The allocation annually of 1% of the TID’s value could delay that closure.

The letter also questioned the adding of another economic development agency for the region when others already are in place. Said the letter:

We don’t understand the need for the creation of a “regional economic development agency”. Our municipalities are well served locally by the Kenosha Area Business Alliance (KABA) and when necessary, regionally by the Milwaukee 7 Economic Development Partnership (M7). We fail to see how another agency layered over or alongside KABA and M7 would improve delivery of service.”

Kerkman said the opposition of the municipalities is why the proposal will not move forward.

The matter has been making the rounds of local municipal meetings lately, In the last two weeks, there has been discussion of the matter at Twin Lakes, Salem Lakes and Paddock Lake village board meetings.

Opposion in Twin Lakes centered on that the 1 percent wasn’t accounted for in the creation of that village’s TID and in effect amounted to a change in terms.

“We’re just making a statement that we don’t think it’s right,” Twin Lakes President Howard Skinner said about the letter.

Paddock Lake village administrator Tim Popanda said he felt the kind of development targeted by such an agency would not likely come to Paddock Lake.

“Paddock Lake is never going to see international business,” Popanda said. “”We’re a mom and pop and bedroom community.”

One notable aspect of the issue is that communities throughout the county — who sometimes have competing interests — did get together on this issue. Both Kreuser and Kerkman felt the interaction was positive.

“I think this discussion has been really helpful,” Kerkman said. “That’s the really most important part of this.”

Said Kresuer: “The input was valuable.”




  1. Matt says:

    Just keep developing. Pretty soon, there will be no land. Keep building small 1 or 2 acre parks..but eventually, we’re out of space. Pretty soon, we’ll be Gurnee or Waukegan…better yet, Kenosha, without a lakefront.

  2. Kale Dolfin says:

    Additional unnecessary bureaucracy doesn’t bring national and international business to an area.

    Lack of it does.

  3. Tom Reilly says:

    Great coverage. Right on top of things and happenings in the communities.

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