An innovative proposal from Alderman Bohl to use millions from current and future city tax incremental districts (TIDs) to fund badly needed street reconstruction projects is being described as an ingenious way of paying for infrastructure work while also providing valuable training and job opportunities for city residents.
The proposal has strong Common Council support, too, evidenced by a recent unanimous passage by members of the Council on Alderman Bohl’s ordinance (file 090623) specifying street-paving costs be included in the plans for newly-created TIDs.
Alderman Bohl said the TID funding for roads plan (trumpeted earlier this year by the Milwaukee Journal Sentinel editorial board) will initially be limited to a handful of TIDs and could free up millions for street reconstruction and maintenance work. If the initiative is extended citywide, project plans could be amended for some or all of the city’s other active tax incremental districts (TIDs) to increase the project costs for each district by the equivalent of approximately one year’s worth of the district’s incremental tax revenue. He said the additional project cost could then be used to fund street reconstruction work within one half mile of a TID boundary.
The ordinance covering newly-created TIDs would include paving projects anticipated to occur within the district and within one half-mile of the district’s boundaries within the next six years (as identified by the city’s most recent six-year local street paving program).
“Funding sorely needed infrastructure work using TID dollars will have little or no impact on our already overburdened present tax levy, while allowing us to also provide valuable jobs and training for city residents who will be hired on to good jobs that pay prevailing wages,” Alderman Bohl said. “This plan is a win-win for the city of Milwaukee.”
According to the city’s Legislative Reference Bureau, the estimated aggregate annual tax increment for the 48 current city TIDs (May 2008) is $30.27 million.
The plan comes after the recent passage of Wisconsin Senate Bill 223, which specifically allows cities to use TID funds for infrastructure improvements within a one-half mile radius of the TID district’s boundaries. According to Alderman Bohl, who met regularly with Common Council President Willie Hines and department heads to craft the strategy, the city Department of Public Works has already identified more than $15 million in street work that meets the TID boundary criterion.
“The maintenance of our city streets and roadways is a core responsibility of local government,” said Alderman Bohl. “By converting portions of our TID funding to public works projects, we have the potential to catch up on overdue road projects while exponentially increasing job opportunities right here in Milwaukee.”
Alderman Bohl said a December 2008 City Comptroller audit report on residential street maintenance he initiated reported that city budgets have underfunded local street replacement and reconstruction for at least two decades, and that 214 miles of local streets (21%) are in poor condition.
To catch up on street maintenance, the audit suggested the city would need to appropriate approximately $25.5 million per year to achieve a 1:1 ratio of service life to replacement cycle. For perspective, funding in recent years has been in the $7 million range with the city riding a budget cycle blip from the state in its most recent budget allocation – a little over $9 million for local road reconstruction, he said.