A proposed state law would keep a good thing going for the city.
The special tax district the city created in 1983 to build its marina is set to retire next year. The district worked, creating $84.5 million in new development and $1.1 million a year in additional property tax value.
But so far, all that new money has gone toward paying off the loan needed to build the marina (and other tax incremental districts in the city). None of it has gone to pay for schools or government services.
That's set to change next year when all of the $1.1 million of development in "TID 2," as it's known, is scheduled to go onto the general tax rolls. That would mean $343,200 to Racine Unified, $147,400 to the county, $58,300 to Gateway and $542,300 to the city itself.
The state law proposed by Rep. Cory Mason, D-Racine, would extend the life of TID 2 by 10 years - and prevent all that tax revenue from going to other local governments. That may seem crazy, especially after the city has waited 27 years to benefit from this development. But there's method to this urban planning madness.
Mason said the city is looking at redeveloping the former Walker Manufacturing site along Lake Michigan and an area along the Root River, which all falls into the existing TID 2. But to get the property ready for a developer, the city needs money to clean up the land. That's where Mason's law comes in.
Extending TID 2 would give the city money to clean up the land and it get it ready for development, Mason said. The alternative is to retire TID 2 and create a new tax district for the Walker site and north of the Root River. But that district would be in effect for another 27 years.
In other words, the city is looking to extend TID 2 for 10 years to avoid creating a district for nearly three times as long, Mason said.
The proposal is targeted specifically at Racine. It's supported by State Reps. Bob Turner, D-Racine, Josh Zepnick, D-Milwaukee, and Peter Barca, D-Kenosha. Sens. John Lehman, D-Racine, Jeff Plale, D-Milwaukee, Spencer Coggs, D-Milwaukee, and Bob Wirch, D-Kenosha.
The bill has a good chance at passing, Mason said. Four or five similar bills pass the Legislature every year, he said.
The problem with TIDs is the delayed payoff. While the city benefits by corraling all of the tax dollars, other local governments are cut out of the tax picture. Racine Unified will lose a minimum of $3.4 million over the life of Mason's bill.