On November 18, 2011, Wisconsin Governor Scott Walker signed Assembly Bill 179 into law, which allows two or more cities to jointly establish a TIF district.  Prior to the adoption of this law, municipalities were only able to establish TIF districts within their own jurisdictions.

The following criteria must be met to establish a multi-jurisdictional TIF district:

• All of the parcels within the proposed TIF district are contiguous;
• The proposed TIF district includes parcels in all of the cities that are parties to the TIF agreement; and
• At least one parcel in each participating city is adjacent to at least one parcel in another participating city.

To create a multi-jurisdictional TIF district, the following approvals are required:

• The governing body of each participating city must approve the resolution establishing the multi-jurisdictional TIF district;
• Each joint review board must approve the multi-jurisdictional TIF district establishment resolution by a majority vote; and
• Any public members of participating cities on the joint review board must approve the establishment resolution.

By amending the TIF law in this way, Wisconsin intends to provide municipalities with a regional economic development tool.

In Chicago’s 2012 proposed budget, approximately $62 Million in TIF funds have been designated as surplus.  Based on Illinois TIF law and current property tax rates, the surplus will be distributed as follows:

• approximately $30 Million to the City of Chicago school district;
• approximately $12 Million to the City of Chicago; and
• the remainder to the other taxing bodies.

Chicago plans to use the one-time surplus distribution of approximately $12 Million as one resource to reduce its $635 Million budget deficit.

This is not the first time that Chicago has tapped TIF funds to temporarily solve budget issues. In 2010, Chicago declared a surplus of approximately $180 million in 25 TIF districts, and used its share (approximately $38 Million) to partially fill a $655 million gap in the 2011 City budget.

As a result of the economic downturn, Chicago is not the only government using TIF dollars to pay for other expenses. Earlier this year, California requested that state-wide redevelopment agencies be allowed to transfer TIF dollars to schools and other special districts.