Saturday, February 16, 2008

Pabst Farms Stressing Local City Budget, Services

The Daily Reporter's Sean Ryan produced a fascinating story about Pabst Farms and the consequences of using Tax Incremental Financing to spur the development there.

The story documents that because the increased property taxes produced through the TIF bonding goes first to repay that debt, and not to City of Oconomowoc general fund coffers, then the city can't afford to supply all the routine services those new property owners expect from a municipality.

So Pabst Farms' developers may have to begin paying for police services for instance, because Oconomowoc can't afford city officers to patrol the new developments.

Ironic, isn't it?

You use city tax money to fuel development, but you can't reap the added tax benefits to provide basic municipal services to the residents and businesses the development has produced.

Maybe TIF is a tool that shouldn't be used to build subdivisions on a small city's remaining or annexed farmland because it will stretch that community's resources to the breaking point.


Dave said...

Agreed... Somebody please tell me how this project passes the "But For Test" or does anything about blight. Clearly TIF financing of greenfield development is well outside the spirit of the law.

Anonymous said...

"Ironic, isn't it?"

Ironic, but true, true, true... All these subdivisions are built without any consideration for cost of services. (Madison and its surrounding cities are a great example.) City governments see the dollar signs of the larger tax base, but it just ends up stretching the water/police/fire/emergency-care departments a bit thinner until the day comes that everyone realizes that more police are needed, or water quality is deteriorating, etc. Then its a political maelstrom.