Bar­rett to Walker: Don’t tell city how to spend

Bud­get pro­vi­sions re­strict funds to im­prove biz dis­tricts

Milwaukee Journal Sentinel - - MILWAUKEE WISCONSIN - TOM DAYKIN

Mil­wau­kee Mayor Tom Bar­rett is ask­ing Gov. Scott Walker to veto pro­vi­sions in the new state bud­get that re­strict state and city fund­ing for the down­town street­car, as well as lo­cal funds used to im­prove neigh­bor­hood busi­ness dis­tricts.

Bar­rett also wants Walker to veto an­other item that would nearly dou­ble the land for which Mar­quette Univer­sity pays no prop­erty taxes.

The street­car fund­ing re­stric­tions ap­pear to be largely sym­bolic. Mil­wau­kee isn’t fund­ing that project through ei­ther of the two meth­ods cov­ered by the bud­get pro­vi­sion.

But the item on busi­ness im­prove­ment dis­tricts would re­duce the amount that dis­tricts can raise for ac­tiv­i­ties such as down­town Mil­wau­kee’s Hol­i­day Lights Fes­ti­val. And the Mar­quette pro­vi­sion could shift a greater prop­erty tax bur­den to Mil­wau­kee busi­nesses and res­i­dents.

All three mea­sures amount to an over­reach by the state Leg­is­la­ture into lo­cal con­trol, Bar­rett said Saturday.

“It’s a gra­tu­itous kick at the city,” he said.

The gov­er­nor has agreed to veto some bud­get items, but his fi­nal veto list hasn’t been re­leased yet, said Tom Even­son, Walker’s spokesman. The Se­nate on Fri­day night ap­proved the de­layed 2017’19 state bud­get, which Walker is ex­pected to sign soon. The bud­get in­cludes:

A ban on Mil­wau­kee us­ing state tran­sit aid or lo­cal funds gen­er­ated through tax in­cre­men­tal fi­nanc­ing dis­tricts to pay for street­car oper­a­tions. Tax fi­nanc­ing dis­tricts use prop­erty taxes gen­er­ated by new de­vel­op­ment, which di­verts that rev­enue from a city’s gen­eral fund, its school dis­trict, county and other lo­cal gov­ern­ments.

How­ever, Mil­wau­kee isn’t us­ing ei­ther fund­ing method barred by the state bud­get, Bar­rett said.

The street­car’s 2.5-mile ini­tial route, to start in fall 2018, runs from the Mil­wau­kee In­ter­modal Station, 433 W. St. Paul Ave., through down­town to the lower east side. It in­cludes a lake­front loop set to open in 2019.

The $128 mil­lion con­struc­tion bud­get for the street­car is funded with a $55 mil­lion fed­eral grant and money gen­er­ated by Mil­wau­kee tax fi­nanc­ing dis­tricts. The es­ti­mated $3.2 mil­lion an­nual op­er­at­ing bud­get will be cov­ered by fares, ad­ver­tis­ing rev­enue, fed­eral grants and cash from city parking me­ters and parking lots.

Rep. Jesse Kre­mer (R-Ke­waskum) spon­sored the fund­ing ban. He said in a state­ment it is needed to stop a “loom­ing threat” that the street­car would seek state cash.

Lim­its on rais­ing cash by Mil­wau­kee’s busi­ness im­prove­ment dis­tricts, key tools in re­de­vel­op­ing down­town and other neigh­bor­hoods.

The dis­tricts are formed by com­mer­cial prop­erty own­ers, who pay ad­di­tional spe­cial charges on their an­nual prop­erty tax bills for items such as mar­ket­ing cam­paigns and events for the dis­trict’s stores and restau­rants; street clean­ing, land­scap­ing and other beau­ti­fi­ca­tion ef­forts, and se­cu­rity ser­vices.

While build­ings with just apart­ments are ex­empt, some of those spe­cial charges come from build­ings that have a mix of apart­ments and street-level com­mer­cial space.

The new state bud­get says that charge can be based only on the value of the mixed-use prop­erty’s com­mer­cial space — and not the

en­tire build­ing’s larger value.

That would re­duce the amount of funds paid to the dis­tricts, with the down­town Mil­wau­kee dis­trict tak­ing a roughly 2% an­nual hit, said Beth Weir­ick, ex­ec­u­tive di­rec­tor.

If that re­stric­tion is to be en­acted, it should ap­ply to busi­ness im­prove­ment dis­tricts through­out Wis­con­sin — not just to Mil­wau­kee, Bar­rett said.

The Jour­nal Sen­tinel has not been able to de­ter­mine which leg­is­la­tor spon­sored the pro­vi­sion.

» An ex­pan­sion of Mar­quette Univer­sity’s grounds that are ex­empt from prop­erty taxes from 80 acres to 150 acres.

Bar­rett said that bud­get item might be tied to Mar­quette’s planned Ath­letic Per­for­mance Re­search Cen­ter, to be de­vel­oped on 12 acres bor­dered by W. Michi­gan, W. Cly­bourn, N. 6th and N. 10th streets. Mar­quette and Aurora Health Care Inc. in Jan­uary 2016 an­nounced plans for the $120 mil­lion de­vel­op­ment.

That pro­vi­sion “came out of the blue,” Bar­rett said. He said it was dis­cour­ag­ing given that city of­fi­cials have helped Mar­quette pur­sue the re­search cen­ter’s de­vel­op­ment and have in­vested in pub­lic im­prove­ments near cam­pus.

“It’s as if lo­cal gov­ern­ment does not ex­ist and lo­cal tax base is unim­por­tant,” Bar­rett said in his let­ter to Walker. “I am cer­tain that had we been con­tacted, a so­lu­tion could have been reached.”

The ex­pan­sion of Mar­quette’s tax-ex­empt cam­pus would al­low it to in­crease its con­tri­bu­tions to the city and state, said Mar­quette spokesman Brian Dor­ring­ton. Those in­clude its com­mu­nity den­tal clin­ics and the univer­sity po­lice depart­ment, he said.

Dor­ring­ton, in a state­ment, said most states “do not place any acreage lim­i­ta­tions on tax-ex­empt prop­erty for ed­u­ca­tional, non-profit re­li­gious or char­i­ta­ble pur­poses.”

That pro­vi­sion was spon­sored by Rep. Dale Kooyenga (R-Brook­field), who cited Mar­quette’s civic con­tri­bu­tions, ac­cord­ing to an Associated Press re­port.

RICK WOOD / MIL­WAU­KEE JOUR­NAL SEN­TINEL

Fund­ing for Mil­wau­kee’s street­car would be re­stricted un­der the new state bud­get. Mayor Tom Bar­rett is ask­ing Gov. Scott Walker to veto that item and other pro­vi­sions aimed at Wis­con­sin’s largest city.

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