Overview of Economic Development Tools: TIF Districts and Tax - PowerPoint PPT Presentation

Overview of Economic Development Tools: TIF Districts and Tax Abatements Ares G. Dalianis December 10, 2018 Indian Prairie Community Unit School District No. 204

What is a TIF District? www.franczek.com 2  Tax Increment Financing  Economic development tool  Available to municipalities  Requires finding of ‘blight’ or ‘conservation area’  Creates a revenue source to fund improvements in a designated area  Significant revenue consequences for other taxing districts

How a TIF District works www.franczek.com 3

Blighting Factors www.franczek.com 4  Dilapidation  Excessive land coverage/overcrowding  Obsolescence  Deleterious land use &  Deterioration layout  Structures below minimum  Environmental clean-up code  Lack of community  Illegal use of structures planning  Excessive vacancies  Declining EAV in 3 of last 5  Lack of ventilation, light or years sanitary  Inadequate utilities

Finding Blight www.franczek.com 5  For a ‘blighted area’ – must demonstrate 5 or more of the 13 factors  For a ‘conservation area’ – must find 3 or more of the factors  Factors must be ‘present to a meaningful extent’ and ‘reasonably distributed’  Municipality will retain a TIF consultant to establish eligibility

Joint Review Board www.franczek.com 6  Convened by the municipality  Discussion of eligibility and other issues  Consists of representatives from community college, schools, park, library, fire protection, township, county, municipality, and a ‘public member’  JRB provides a recommendation  If no, municipal approval must be 3/5 (rather than simple majority)

Concerns with TIF districts www.franczek.com 7  23 term  Shifts tax burden across multiple communities – Limiting rate implications – No access to ‘new property’ EAV for life of TIF district  Over time raises tax rate without raising revenue for school district – Hidden tax increase  ‘Mission creep’  Potential for Route 59 TIF arm’s race  Possible 12 year extension (so 35 years total)

Property Tax Abatements www.franczek.com 8  Sec. 18-165 of Property Tax Code – Ten year term limit – $4.0 million cap for all taxing districts combined  Targeted economic development tool  Requires affirmative consent from taxing district  PTELL implications – Access to ‘new property EAV’  A few examples