by: Diane Benjamin
What is a TIF district? Tax Increment Financing. The latest information posted on the Illinois Comptroller’s website (2010) shows Bloomington has 2 – Normal has 4:
TIF districts are used as a re-development tool when taxes don’t want to be raised. The City of Bloomington will consider creating one tonight to promote re-development on the west side of Bloomington.
Here’s what happens. The current real estate taxes will continue to be distributed to the various taxing agencies, like schools, City of Bloomington etc. The City can then borrow money for re-development based on the INCREASED property values (and increased property taxes in the future) after the re-development. The City gets to keep all of the additional taxes raised, thus giving them money to pay back the loans and more.
If a property currently receives a real estate tax bill of $2000, the tax bill might rise to $2500 because of area improvements. The City gets to keep the extra $500. Hopefully it would first be used to pay back any loans.
If you are a long time reader, I extensively covered how the Normal Uptown TIF inflated property values causing many property tax bills to double or more. The Town of Normal bought properties, many for more than the assessed values. Either the Town Assessor was undervaluing properties, or Normal paid more to increase the assessed value.
The biggest complaint against TIF districts is they create a slush funds for government to spend with little oversight. A TIF district can last for 23 years. Whoever is elected gets to decide how the money is spent. Mayor Renner and David Hales may have one vision for the West side, the next Mayor might totally disagree. Additionally, other taxing bodies do not share in the increased property values until the TIF ends.
IWU students did a TIF study, it is included in the packet for tonight’s meeting It starts on page 159: http://www.cityblm.org/Modules/ShowDocument.aspx?documentid=6730
Excerpts:
In any case, it is clear from these results that drawing broad conclusions about the effectiveness of TIF in general would be a mistake.
Bloomington is not Chicago, but even ethically uncompromised planners will need to take care to make sure that TIF money is used only to address real community needs..
See page 177 and following for their assessment of the west-side TIF.
The students did extensive research on TIF districts in surrounding cities. What they failed to do is look at the performance of the 2 TIF districts Bloomington already has. The Ensenberger building and the Castle Theater were both supported by TIF money. The developer of the Castle Theater declared bankruptcy and the Ensenberger building has never fully developed the promised luxury condos and people willing to buy them.
The Pantagraph did a report in 2012 on the Ensenberger TIF: http://www.pantagraph.com/news/local/solitary-luxury-ensenberger-occupancy-still-low-after-tif-funded-renovation/article_59124e5a-ad06-11e1-a6e6-0019bb2963f4.html
In 2009 the Pantagraph did this TIF story which included the Castle Theater: http://www.pantagraph.com/news/local/with-tif-set-to-expire-bloomington-seeks-new-ways-to/article_267a7c90-c0fc-11de-b339-001cc4c03286.html
The real question that must be answered is: Can government be trusted to use the money generated wisely?
Bloomington’s past track record isn’t good.
More information on TIF’s can be found here: http://www.illinois-tif.com/files/5513/6589/4292/InfoBrief06-1.pdf
