Racine Mayor John Dickert vowed during a 2017 budget address on Wednesday to keep fighting to find a way to fund a $46 million hotel and event arena project in downtown Racine.
In making this promise, Dickert highlighted the need for more jobs and bringing more tourism to the downtown area. He also chastised corporations that have challenged their property tax assessments by suing the city as the property tax adjustments has left a $750,000 hole in the city’s budget that needed to be made up in the city’s tax levy. With that said, if the 2017 tax levy is approve, it will increase about 1.4 percent.
The city’s future remains bright, Dickert said.
“I am proud to say for the second straight year the difficult decisions that we made together since 2009 have allowed us to present to you a strong budget,” he said.
Dickert Vows to Fight for Arena, Hotel
The construction of the event center — which would be located on 3.5-acres on the southeast corner of Lake Avenue and Gas Light Drive in Racine — could be financed and paid for with tax dollars: 2/3 by city residents and 1/3 by Racine County through a.5 percent stadium tax, a Downtown Racine Arena Market and Feasibility Study suggested.
The $46 million project would come with hundreds of jobs, a possible minor league hockey team and a Milwaukee Bucks developmental franchise. The deadline the Bucks want to make their decision by: Oct. 15. Racine County residents already pay a .1 percent tax for Miller Park Stadium.
While the county has invited the authors of the study to speak to the county board on Oct. 18, Racine County Executive Jonathan Delagrave has said the county board needs more time to vet the project.
“The message we are getting from the county is that they are not interested and you can’t do it next year, we don’t have time,” Dickert said. “Whether we have partners or not, we will find a way to move the Hotel/Arena project forward because we need to invest in Racine. 823 jobs matter, $400 million in residual investment in our community matter, and nearly 400,000 people visiting our downtown every year matter. That brings money, jobs and people into downtown. We need to invest in Racine.”
The city has been in discussion with its financial consultants to see how the city might partner with investors. While attending a meeting about green infrastructure in New York a few weeks ago, Dickert met with several investors to talk about the possibility of them helping the city fund the project.
“We had a very good meeting and we’re looking at options to see how we can do it,” Dickert said. “If we miss this opportunity… someone else will and that may be someone nearer than we think.”
2017 Budget Includes Tax Increase
If approved, the budget would result in a $23.75 increase for a home assessed at $100,000 on the city portion levied to Racine residents. Property owners would also see an increase in storm water utility ($6.09) and recycling fees ($6.93).
The tax increase would support a proposed levy of $53,851,527, a $748,380 increase or 1.4 percent over the 2016 budget. The levy is the amount of funds property owners pay to support the budget, which includes a variety of line item like the general fund, debt, and capital projects. The proposed budget calls for spending $200,072,706 in 2017, a $2,881,353 increase or 1.46 percent over 2016. Included in that budget is $81,161,448, a $245,550 or .3 percent increase.
While Dickert characterized the budget as strong, he noted an increase in health care costs despite efforts to minimize the increases.
“We have worked hard over the last year to analyze our operations and contracts to limit the increased cost of healthcare,” he said. “We continue to see, however, growth in the cost of prescription drugs which will likely impact on future budgets.”
Dickert: Corporations Not Paying Their Fair Share
But some corporations have taken a stronger stance against their property tax assessments, which has shifted the tax burden onto residential property owners.
Dickert emphasized how the city’s legal department has spent $400,000 fighting tax assessment challenges lodged by companies wanting their property taxes reduced. In 2016 alone, the property tax adjustments totaled over $750,000, which resulted in the tax burden being shifted from those commercial properties to residential property owners, Dickert said.
About 12 companies have been challenging their property tax assessments for the past four to five years, including InSinkerator, Walgreens, Target, Sears, CVS, and Regency Mall. This has been a national trend, but Dickert wants the State Legislature to address the issue.
“They used to go to the standard board of appeals and say, I’m appealing my taxes,” Dickert said. “Now they just walk in with 15 attorneys and say: ‘We’re suing you.'”
The corporations know that the city only allocates $350,000 per year for legal cases. To battle the lawsuits would drain the city’s budget. The League of Municipalities is expected to help craft legislation to address the issue, Dickert said.
“This is happening all over the state and all over the country,” he said. “All of the cities and villages are just getting killed by this…. They are asking us to treat them like they are a dark store (or empty store), and you’re not.”
Common Council members will continue to discuss the budget, which still needs their final approval before the city can levy taxpayers, over the next few weeks. A public hearing on the proposed budget is set for Nov. 3. On Nov. 9, the Common Council can proposed amendments to the budget.