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

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What is a TIF District?

• 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

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How a TIF District works

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Blighting Factors

• Dilapidation
• Obsolescence
• Deterioration
• Structures below minimum

code

• Illegal use of structures
• Excessive vacancies
• Lack of ventilation, light or

sanitary

• Inadequate utilities
• Excessive land

coverage/overcrowding

• Deleterious land use &

layout

• Environmental clean-up
• Lack of community

planning

• Declining EAV in 3 of last 5

years

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Finding Blight

• 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

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Joint Review Board

• 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)

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Concerns with TIF districts

• 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)

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Property Tax Abatements

• 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