After closing a taxpayer funded district in Business Park North — the city will receive a projected $130,000 by the end of August 2021.
City finance director Jamin Friedl reported that budget-friendly figure during the Aug. 25 Common Council meeting.
The tax-increment financing district, TID 3, is east of Williams drive and includes businesses such as Exclusively Roses, Zalk Josephs Fabrications and Colorcon. It was terminated at the council meeting and has an expected surplus of $350,000 to distribute among its underlying taxing districts, which are the City of Stoughton, Dane County, Madison College and the Stoughton Area School District, a July 14 memo from assistant finance director Ryan Wiesen states.
TIF is a public financing method that is used as a subsidy for redevelopment, infrastructure, and other community-improvement projects. It captures property tax revenue from all underlying taxing jurisdictions of the newly developed property and uses the new tax revenue to pay for public improvements.
Each district pays into the district based on its proportion of property taxes, and that calculation will determine the payout from remaining funds after the district’s closure. For the city, that’s estimated at around 37%.
TID 3 had a base value of $94,000 when it was created in 1993, and it was valued at $20.7 million in 2016.
The closing of the TID will increase the tax levy that goes to the city by approximately $65,000, the memo states.
TID 3 had been scheduled to end in 2019 but was extended one year so the revenue could be used in the 2021 tax year to fund affordable housing initiatives.