How Mayor Tom Barrett’s downtown streetcar IS taking money away from MPS

By Chris Johnson, Editor

FEBRUARY 5, 2015

There has been a lot of discussion in recent days about Mayor Barrett’s downtown streetcar proposal. Discussions about who will actually benefit from this city-wide taxpayer funded project, who is being overlooked and left out from participating in the planning, construction, and use of the streetcar, which neighborhoods are deliberately or indeliberately being excluded from planned extended map routes, in particular on the north and south side.

The most recent and most vigorous discussion has centered around how the proposed downtown streetcar proposal will be financed, in particular whether or not Milwaukee Public Schools (MPS) future revenues will be sacrificed to finance the downtown streetcar.

This discussion has resulted in a retraction (see retraction here) from the City of Milwaukee Legislative Research Bureau (LRB) about three memos that the department released in the last month regarding how much of future tax property revenue would be “deferred” or “diverted” from MPS, and other taxing entities, to pay for the streetcar financing. A retraction from the City of Milwaukee research department has never happened before in recent history.

The position that Mayor Barrett’s administration, downtown Ald. Bauman and eastside Ald. Kovac have adopted, that no future MPS funds will be used to finance the downtown streetcar, is simply not true or factual!

Let’s begin with where the majority of the financing for the proposed streetcar is to come from, Tax Incremental Districts (TIDs) #56 and #82. TID #82 is a newly proposed district supported by Mayor Barrett, downtown Ald. Bauman, eastside Ald. Kovac and several north side alderpersons.

The #56 TID was originally created to extend the Riverwalk along the east bank of the Milwaukee River between North Broadway and the Harbor. This TID has already made all of their debt obligation payments and has reimbursed all of the costs related to that project, which normally results in the TID being terminated and the property tax revenues going back to the taxing entities (MPS, MATC, MMSD, City of Milwaukee and Milwaukee County).

That never occurred with #56 TID, the Common Council along with the City of Milwaukee Redevelopment Authority and the Joint Review Board amended the #56 TID to become a “donor” TID. A “donor” TID may allocate increased, or incremental, property taxes to another TID for up to 10 years.

This is one way in which Mayor Barrett’s downtown streetcar is deferring money away from MPS. Those property tax revenues from TID #56 are now proposed to go to finance the streetcar, instead of going to the taxing entities, which includes MPS. THE STREETCAR IS TAKING MONEY AWAY FROM MPS.

The establishment of the downtown streetcar TID is another obstacle against moving the Black community out of poverty. It becomes another impairment to MPS because TIDs that have been established in the past, by and large, have been used as “donor” TIDs to support other TIDs in the city.

The results of these actions by the mayor, his networks and the status quo is clear. Poverty in the Black community continues to churn in Black neighborhoods, as in the past thirty years, because the status quo has not allowed TIDs to terminate. By not allowing most of these TIDs to terminate, the Black community becomes the casualty of this economic policy because those revenue streams, which should be freed up to support economic policies that would address and begin the process of fighting back poverty in the Black community, are now tied up again for years to support other TIDs as “donor” TIDs.

So in essence, the mayor is taking money away from MPS and from the black community when he and the Common Council prevent TIDs from terminating and use them to be “donor” TIDs to support projects like his choo-choo train.

The cost to the economic life of the Black community by these practices is of no concern to the city’s status quo as illustrated by the fact that Milwaukee is a leader in segregation, Black male unemployment, Black male incarceration and other social factors that are compounded by poverty.

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Last edited by Tyler Schuster.   Page last modified on February 05, 2015

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