After Sturtevant’s lucrative tax incremental financing (TIF) district closes next year, village property owners will most likely see a 25 percent decrease in their property taxes in 2017.
In a nutshell, the TIF closure is expected to bring the village mill rate down from $8.60/$1,000 in assessed value in 2016 to $6.80/$1.000 in assessed value in 2017.
Village Administrator/Clerk Mary Cole with Village Engineer Jeff Seitz and Village Assessor Jim Henke made a presentation Tuesday to board members and the Community Development Authority explaining the steps involved with closing a TIF and how it impacts Sturtevant’s bottom line.
Because there are revenues above and beyond what the village needs to pay off the district’s remaining loans and expenses, the TIF can be closed. To close the TIF district, the village needs $10.5 million, which it has with tax revenues and the district’s fund balance:
TIF fund balance: $5,441,619 (according to 2014 audit)
2015 tax revenues: $4,505,416
2016 tax revenues: $5,029,281
After the $10.5 million is paid, the village will have a balance of $4,440,083, which will be divvied up between Sturtevant, Racine Unified, Gateway, the county and the state. Because the total value of the TIF – $222,114,400 – is roughly 40 percent of the village’s total value – $332,453,990 – the village gets 40 percent of the overage, putting around $1.7 million back into village coffers.
“The vision of the board back in 1994 when this thing was established is incredible, and I know people scoffed, they said you’d bankrupt the village,” President Steve Jansen said. “But look at the difference this is making with our property taxes.”
Theoretically, tax bills for Racine Unified, Gateway and the county should go down as well. Not only are those taxing bodies getting a one-time payment from their share of the district overage, but the increase in Sturtevant’s equalized value also means greater value overall.
According to state statute, board members can raise the 2017 levy by 20 percent over the 2016 levy of $2.9 million. That amount is half of the TIF district’s value in relation to the village’s value – around $594,000. Because the village’s total value will rise to $554.6 million and the businesses within the TIF will start paying property taxes to the village instead of to the TIF for infrastructure like sewer, water and roads, tax rates will go down for every property owner in Sturtevant, including businesses.
Cole urged trustees to take the levy boost – which is a one-time opportunity – to take full advantage of the maximum property tax decrease available and to plug more money into the general fund to hire additional police officers and expand village services.
CDA member Kathy Johnson agreed.
“There is absolutely no detriment to doing that,” she said. “It’s payback time.”
The TIF district will close sometime between February and July 2016, and must be decertified by May 2016 in order for the tax relief to go into affect in 2017.
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