Report finds funding strategy for Milwaukee's streetcar unusual compared to other cities

MADISON, Wis. (CBS 58) -- A new report out Thursday takes a look at the way Milwaukee's streetcar is funded. The report comes as the city looks for ways to pay for the expansion of the line throughout the city. 

Milwaukee's streetcar is funded by a combination of federal grants and tax incremental financing or TIF districts. 

The TIF Districts pay off if there's new development as a result of the streetcar which the city is seeing downtown. 

But a new report from the Wisconsin Policy Forum looks at how viable that funding model is for future expansion into other neighborhoods where development may not be as robust. 

The report looked at nine other cities that have streetcars and only two used TIF Districts and to a far lesser extent than Milwaukee has. 

The report found that Milwaukee is limited to using either general tax revenue or TIF Districts to fund the streetcar because of state law, something that has to be considered if expansion continues. 

"When we think about extending the streetcar and trying to make sure we serve neighborhoods that could benefit from having the streetcar and the potential new development that it could bring,  in that case the new development is much more uncertain, and so it's a riskier endeavor if we were to try to use TIF to finance the streetcar in those parts of the city," says Rob Henken, Wisconsin Policy Forum President. 

In a statement, a Department of City Development spokesperson said that the use of TIF has protected taxpayers from incurring the costs of the streetcar and that they are seeing property values rising along the line and that was expected when they decided to use TIF. They added that it will be a key part in helping expand the streetcar.