John Paul FinanUrban Studies Master’s

Candidate, Fall 2011

Copyright 2011 by John Paul L. Finan

Sources: Marose, 1975; Milwaukee Journal, November 13, 1975; Milwaukee Sentinel, November 17, 1975.

The Rise of Local Development Effort in the Milwaukee-Racine Area

Source: Author’s calculations

Research Question:Research Question:

Common for local incentive studies:Common for local incentive studies:

Property Values Property Values = Controls + = Controls + Local PolicyLocal Policy

Common for local development studies:Common for local development studies:

Local Development Local Development = Controls + = Controls + Local Tax RateLocal Tax Rate

Common for local incentive studies:Common for local incentive studies:

Property Values Property Values = Controls + = Controls + Local PolicyLocal Policy

Common for local development studies:Common for local development studies:

Local Development Local Development = Controls + = Controls + Local Tax RateLocal Tax Rate

Local Development Local Development = Controls + = Controls + Local Local PolicyPolicy

Development Levels:• Manufacturing

Jobs Value Added

• Non-retail Services Jobs Receipts

• Retail Jobs Sales

Development Efforts

• Cumulative time a CDA has been active

• Cumulative amount spent on tax increment financed infrastructure

Sources: Milwaukee Sentinel October 14, 1994; Milwaukee Sentinel June 18, 1973;

Shorewood’s Community Development Authority:

promoting

and

planning

local development.

… typical result of CDA recommendations:

Source: Daykin (1994).

Detroit Model• Periods TIF has

existed• Periods a DDA has

existed• Property Tax

Abatements• Industrial Revenue

Bonds

Milwaukee Model• Per capita TIF spend

by industry category• Periods an active

CDA/RA has existed• N/A (not used in WI)• Data on WI IRBs not

available• 1/6th the size of TIF• Effectively even less• Very poor reporting• Very little media

All measures of local development came from the Economic Census• Years 1977, 1982, 1987, 1992: Hard Copy Only• Years 1997, 2002, and 2007: Available for

Download

Minimum Sizes• Incorporated Places (Cities and Villages): 5,000• Unincorporated Towns: 10,000• Total of 55 communities were large enough for 3

or more periods

Structural• National Economic Structure

Cyclical• National Unemployment Rate

Local• Percent African American• Housing Age• Housing Density • Violent Crime Rate

Manufacturing Value Added, Selected Cities

CDAInter-actions

TIFInter-actions

TIFCDA

1% increase in TIF:• 238 fewer jobs• $5.6 million additional value added

• TIF more effective for jobs in denser places, more effective for value in higher crime places

1% increase in CDA time:• 2,801 more jobs•$1.4 million less value added• Difficult to conclude that CDAs are the “silver bullet”

12 relationships tested in total• 9 significant

4 positive All CDA variables

5 negative

Average cum. TIF spending, 2007: $1,689.• Milwaukee: $637• Racine: $1,139• Grafton: $4,339• Hartland: $3,547• Sussex: $3,159

Are overall levels of economic development in the Milwaukee Racine metropolitan area affected by municipal economic development efforts?

• Regarding TIF: maybe, but not positively!

• Regarding CDAs: apparently yes, and in a positive way which needs more examination.

Abravanel, M., Pindus, N., & Theodus, B. (2010). Evaluating community and economicdevelopment programs: A literature review to inform evaluation of the NewMarkets Tax Credit Program. Washington, D.C.: The Urban InstituteMetropolitan Housing and Communities Policy Center.

 Daykin, T. October 7, 1994. “Industrial parks Moving Forward”. Milwaukee Sentinel, p. 1D.  Marose, R. (November 5, 1975). “Tax Increment Financing Seen Spur to City Growth.”

Milwaukee Sentinel, p. 5. Milwaukee Journal, November 13, 1975. “Downtown aid bill signed by Governor.” Milwaukee

Journal , p. 1. Milwaukee Sentinel, November 17, 1975. “Renewal Spur” [editorial]. Milwaukee Sentinel, p. 18. Milwaukee Sentinel. June 18, 1973 “TIF Districts approved by Waukesha Council.” Milwaukee

Sentinel, p. 4. Milwaukee Sentinel. October 14, 1994. “Business strip upgrade backed.” Milwaukee Sentinel, p.

6A.