Tax Incremental Finance (TIF)

Municipal Expenditures and Debt

  1. What is an expenditure?
  2. Do eligible costs include the capitalized interest and other costs of issuing debt for the Tax Incremental District (TID)?
  3. Are the costs of refunding temporary debt to fund projects eligible to be paid from the TID fund?
  4. What date is used to measure the start of the expenditure period?
  5. How are excess funds divided among the overlying taxing jurisdictions?
  6. Can expenditures be made after the implementation period, if an escrow account is established?
  7. Can debt service payments be made after the implementation period?
  8. Are there any restrictions on the length of maturity for TID debt?
  9. Can a municipality put money into a TID fund and repay itself later?

  1. What is an expenditure?

    Sec. 66.1105(6)(am)3, Wis. Stats., defines it as the exchange of money for the delivery of goods or services.

  2. Do eligible costs include the capitalized interest and other costs of issuing debt for the Tax Incremental District (TID)?

    Yes. These costs are financing costs authorized in sec. 66.1105(2)(f)1.b., Wis. Stats.

  3. Are the costs of refinancing temporary debt to fund projects eligible to be paid from the TID fund?

    Yes. They are financing costs authorized under sec. 66.1105(2)(f)1.b., Wis. Stats.

  4. What date is used to measure the start of the expenditure period?

    The date the local governing body approves the creation resolution.

  1. How are excess funds divided among the overlying taxing jurisdictions?

    According to sec. 66.1105(6)(c), Wis. Stats., excess funds should be paid to the taxing entities in the proportion to the amounts that belong to them. It is recommended that the distribution should be based on the most recent tax levy proportions.

  2. Can expenditures be made after the implementation period, if an escrow account is established?

    No expenditure may be made later than 5 years before the unextended termination date of a tax incremental district.

  3. Can debt service payments be made after the implementation period?

    Yes, see sec. 66.1105(6)(c), Wis. Stats.

  4. Are there any restrictions on the length of maturity for TID debt?

    The same restrictions for other municipal debt apply to TID debt and would likely not mature beyond the TID's maximum life.

  5. Can a municipality put money into a TID fund and repay itself later?
  6. Yes, and a reasonable interest cost can be charged for advances to the TID fund.

 

FOR MORE INFORMATION PLEASE CONTACT:

WISCONSIN DEPARTMENT OF REVENUE
Division of State and Local Finance
Office of Technical and Assessment Services
P.O. Box 8971 MS 6-97
Madison, WI 53708-8971
Phone: (608) 266-5708
Fax: (608) 264-6897
E-Mail Additional Questions

Last updated March 22, 2013