The author of a bill to change Business Improvement Districts says some businesses pay too much.
But local officials say the bill would slash funding for a key local economic development tool, hurting efforts to sustain jobs.
At issue is the wording in the state statute allowing municipalities to create BIDs, which business owners within the district help fund by paying a special assessment. The statute says tax-exempt property and buildings that are “used exclusively for residential purposes” don’t have to pay the special assessment.
That means that buildings with only apartments don’t pay the assessment, while mixed-use properties are generally assessed for both the businesses on the first floor and the apartments above them, said Chuck Law, who tracks the 86 BIDs across the state as the director of the UW-Extension’s Local Government Center.
The bill was introduced in late June and got a public hearing in the Senate on Sept. 23.
State Sen. Duey Stroebel, R-Saukville, who authored the bill, said it makes a “simple change to put all forms of development on an even playing field.”
“This small revision should remove a disincentive for job creators to develop mixed-use properties in communities throughout Wisconsin,’’ he said. “Businesses should and will pay their fair share of BID assessments under SB 203, but they should not pay out of proportion.’’
BID directors, however, say the change would significantly alter their budgets — and that any issues should be solved locally, not through a statewide change.
“I see where they’re coming from, but it’s going to be the downfall of downtown if that happens,” said Karin Buhle, the executive director of the Downtown Hartford BID.
Jennifer Stephany, the Downtown Appleton BID executive director, said the bill would “absolutely impact our ability to care for downtown” through activities like power washing the sidewalks or planting flowers in the area.
Yet Tim Gokhman, the director of New Land Enterprises in Milwaukee, who backs the bill, said although he supports the BIDs his properties are a part of, the issue “boils down to equitability.”
“We’re more than happy to contribute to the work that BIDs do, and it’s important work,” Gokhman said. “But the law is pretty straightforward. Residential doesn’t get taxed.”