Joint Board of Review

Members of the TID #1 - Joint Review Board (JRB) represent the Town of Salem taxing jurisdiction to approve, deny or amend a Tax Incremental District (TID). The JRB uses tax incremental financing (TIF) to help the Town invest in economic development.
The Town of Salem JRB for TID #1 consists of a representative from each school district, Kenosha County, Gateway Technical Institute district; a representative from the Town of Salem and a public member. 

District Representatives
• School – the school board president, or his or her designee with preference to the school district’s finance director.  If the TID is located in a union high school district, the school seat is shared by the union high school representative and school district representative; each having one-half a vote.
• Technical college – the technical college district director, or his or her designee with preference to the district’s chief financial officer.
• County – the county executive or the county board chairperson, or this person’s designee with preference to the county treasurer.
• City/Village/Town – the mayor or city manager, or the village board president, or town chairman, or this person’s designee with preference to the person who administers the economic development programs or the municipal treasurer.
• Public member – this member is chosen by a majority of the other members at the JRB’s first meeting (held before the public hearing and within 14 days of the public notice being published). There is no guidance with respect to who is eligible for this seat, but preference should be given to residents with knowledge of finance or economic development.
• JRB chairperson – the chair of the JRB is chosen by a vote of the other members at the first meeting of the JRB

Joint Board of Review Document Review
The Town of Salem must provide the JRB with lists of information and projections under state law, (sec. 66.1105(4)(i), sec. 60.85(3)(k), sec. 66.1106 (3)(b), Wis. Stats.).  JRB members may request missing information.  The following are documents which may be reviewed.
• Detailed list of project costs, resolutions, planning documents and public records - copies of the planning commission and municipal resolutions, minutes of meetings, public hearing and affidavits from the newspaper.
• Economic Feasibility Study - to review a projection of the tax increments and estimates of increased property values.
• Tax increments - to be generated over the TID’s life.
• Increased property value in the TID - when the project costs are paid and the TID is terminated.
• An explanation of why the property owners in the TID who benefit from the improvements, should not pay for them.
• The share of projected tax increments - owners of taxable property in each of the overlying taxing jurisdictions will pay.  The share should be determined for each year an increment is anticipated. One way to calculate it is to apportion each estimated tax increment in the project plan TIF revenue projection.  Each overlying district’s share would be based on its historic percent of the tax rate. (ex: if the school levy represents 47% of the tax dollar, its share of the projected tax increments would be 47% of the total).
• The benefits property owners in these jurisdictions received to compensate them for their share of the projected tax increments. These benefits may be easily identified or more subtle.  The obvious benefit is increased property values that in theory would not happen without the creation of the TID.  When the TID is terminated, the increased value will become part of the tax base for all jurisdictions. The result should be lower tax rates than if the increase had not taken place. More subtle reasons include: increased job opportunities, a better business climate and improved economic conditions.

JRB Standards of Review
The JRB must make a decision based on the documents/information.  The JRB uses the standards of review listed below, for approving or denying a proposal under state law, (sec. 66.1105(4m)(c,), sec. 66.1106(3)(c), sec. 60.85(4)(c), Wis. Stats.).  Each of the standards is important to ensure the TIF project is beneficial for all taxpayers in the overlying districts.  Many consider the first standard, the “but for test,” the most important.  The “but for test” gets its name from the phrase, “this development would not happen but for the use of TIF.”  This means that the developer would not consider the project economically viable without the use of TIF to pay for the needed infrastructure improvements.  Below are the standards considered.

1. Would the expected development occur without (but for) the use of TIF?
2. Will the development’s economic benefits measured by increased employment, business and personal income and property value, compensate for the cost of the improvements?
3. Do the benefits outweigh the taxes residents of overlying districts are expected to pay?
4. How does this planned development fit in with the rest of the development in my district?
5. Is there a more viable use for the development site, the tax revenue and the limited TIF capacity?
6. What is the general opinion of my district’s residents on this TID?
7. How will my jurisdiction know what is spent and received for this TID?
8. How will the planned development affect the demand for services from my district’s residents (schools, police, fire, EMS)?
9. What guarantees are in place to ensure the anticipated tax revenue is actually collected?
10. For towns - will the project costs relate directly to: agricultural, forestry, manufacturing or tourism projects; residential development or related retail development? (sec. 60.85(2)(b), Wis. Stats.)

When deciding if a proposal passes the “but for test,” the municipality and the developer must demonstrate that paying for the improvements makes the project unprofitable for the developer. They must show that the development will only happen with financial support of the taxpayers. One way to show this would be to compare the development’s expected revenues net present value to the anticipated cost of the improvements plus the cost of developing the TID.  The JRB may also hold additional public hearings as part of their deliberations.