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Wednesday, November 26, 2014 |  Madison, WI: 14.0° F  Fog/Mist
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Mayor Soglin says downtown TIF money belongs to the city, not the Madison school district
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Soglin (right): 'The money in there is the city of Madison taxpayers'.'
Credit:Joe Tarr

Mayor Paul Soglin wants to make one thing perfectly clear: money sitting in a tax incremental financing district downtown belongs to the city, not the schools.

The city wants to use the TIF district to help pay for the controversial Judge Doyle Square project, which includes a hotel for Monona Terrace, offices, retail and housing.

But the Madison School District has asked the city to close TID 25 (PDF), where the project is located. If it were to close this year, the schools would get about $7.5 million of about $16.7 million in unclaimed reserves. The city, Dane County, Madison College and the state would get the rest.

Soglin has said he won't close the district, but he met with city staff and alders in an informal meeting to look at ways to advance the schools some of the money it would otherwise get.

The mayor opened the meeting with a statement that suggested acrimony.

"The money in there is the city of Madison taxpayers," he said. "If we do something, the school district boundaries and the city boundaries are not coterminous. So that raises an interesting question about any kind of arrangement we'd make. Will these funds then be used for residents of communities outside the city of Madison: Fitchburg, town of Madison, Shorewood, Maple Bluff, even parts of Oregon?"

School board member TJ Mertz, who wasn't at the meeting, has a slightly different take. Although he agrees that the city and school district boundaries don't line up, Mertz says the district has to treat all of its students equally.

"If he's trying to make sure city resources go to city children, then I as a school board member find it difficult to see how we can work with that," he says. "The attitude that I have is the money is our money. Forty-five percent of it was collected on our taxing authority. And it was collected for a project that is now complete and paid for."

TID 25 is scheduled to close in 2022 and the city has until 2017 to make new expenditures or loans from it. However, any new expenditures need to be approved by the Joint Review Board, a five-member body made up of members of the four tax bodies (the city, schools, Dane County and Madison College), plus a member of the public appointed by the city.

Since the school district wants its money sooner, rather than later, the city is looking for ways to give it money without closing the district.

City finance director David Schmiedicke outlined for the mayor and alders Friday some ways to do so. They included loaning the district money, taking out a promissory note, purchasing assets for the school district (such as computer tablets), and closing the TIF district and opening a new one. The idea that seemed to get the most interest is to make an early distribution of some of the revenue that has been collected in the TID, but allowing it to remain open.

Schmiedicke said he has not found an example where this has been done in Wisconsin. "Some of these have not been tried," he said. "It doesn't mean you can't do them."

After the meeting, Schmiedicke said he didn't think it would be possible for the city to advance money to just one of the taxing entities, it would have to forward it to all of them.

The school district's budget is roughly $390 million, Mertz says, adding that the $7.5 million in surplus is not insignificant. "We can always find use for $7 million dollars."

He adds, "If they don't find a way to get us surplus up front, I don't see supporting the project at all."

Nevertheless, Mertz says that although the schools and cities seem to be at loggerheads over the issue of TID 25, the two bodies generally have a good relationship.

"If there's a turf battle, it's not at the center, it's off to the side," he said. "We have no choice but to work together."

He adds: "This might be a TIF tiff, but it's not going to be turf war."

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