Pay Bills

Tax bodies argue over impact of bill to limit special tax districts

Lawmakers are considering a bill to bring more accountability and transparency to the funding of tax increases, a funding tool used by many municipalities to fund economic development projects in areas considered run-down and dilapidated.

Some suburban communities are among the groups opposing legislation they say will limit their ability to spur economic development. But many school districts, park districts, and similar tax agencies support it because they believe it will limit the amount of taxes TIFs take away from them.

“Under current law, the municipalities call all the shots and the joint review board has no authority,” said State Sen. Ann Gillespie, a Democrat from Arlington Heights. “And so, it’s important that (tax bodies) have a say, because it impacts what they’re able to do.”

In a TIF district, other underlying taxing bodies, such as schools and park districts, receive property tax revenue based on the value of the land at the time the TIF district is created and throughout. throughout its lifespan.

During the lifetime of a neighborhood, any additional funds from an increase in property value are channeled to pay for infrastructure development within its boundaries, including sidewalks, gutters, sewers, and streetlights .

The proposal put forward by Gillespie and co-sponsored by State Senator Melinda Bush, a Democrat from Grayslake, limits the life of a TIF to 10 years instead of 23 years. And the joint review board, which is made up of a representative from each tax agency and a member of the public, has the power to approve or disapprove the extension of a TIF to 15 years. Currently, the legislator must approve an extension of the TIF up to 35 years.


In addition, the bill requires the municipality to enter into a written agreement with council outlining how any money left over after development costs are covered is distributed. It also shortens the time for allocating these excess funds among tax agencies from 180 days to 90 days.

In the bill, when vacancy is used to determine “scourge,” 25% of buildings in the area must be vacant, she said.

“What the bill is trying to do is put objective standards on what constitutes blight so that it’s not used in areas that really aren’t what most people would consider blight to be. “, Gillespie said.

It was these changes that caused the Northwest Municipal Conference, the Illinois Tax Increment Association and suburban Chicago villages to oppose the bill.

“The bill would effectively reduce the effectiveness and ability of municipalities to use the TIF as an economic development tool,” said Mark Fowler, executive director of NMC, a Cook Counties local government advocacy organization, DuPage, Kane, Lake and McHenry.

Parts of the bill, such as the definition of burnout and the shortening of the timeline for a TIF, “may increase uncertainty about the ability to launch a successful redevelopment project,” Fowler said.

He fears the bill will give the board veto powers over development projects.

Palatine officials were among those who opposed the bill at a hearing in April 2021, but in a statement, Reid Ottesen, the village manager, said: “While we had concerns about some aspects of what was in the original bill, we raised them directly with Senator Gillespie.

Neither Ottesen nor Gillespie would describe the village’s concerns or how they were addressed.

An extension of the city center of the Palatine TIF is under study by the legislator.

Other opposing communities include Arlington Heights, Northbrook, Hoffman Estates, Rolling Meadows, and Northfield.

The Illinois School Boards Association, which represents nearly all school boards in the state, supports the bill.

“Obviously TIFs can be a very beneficial thing for communities that also report for schools,” said Deanna Sullivan, director of government relations for the IASB. “We just think there needs to be greater inclusion of local tax districts in the process, so schools aren’t unduly impacted.”

School districts would like opportunities to work with municipalities to determine how surplus funds are spent. Instead, tax bodies can make recommendations to municipalities but have no authority over funds, she said.

The bill is being considered as part of a property tax reform package that includes HB2393 introduced by State Representative Stephanie Kifowit, an Aurora Democrat, and HB1079, introduced by State Representative Stephanie Kifowit. State Rita Mayfield, a Democrat from Waukegan. Both bills include similar language requiring a notification slip with each homeowner’s tax bill showing how many dollars are going towards a TIF.

Kifowit said it’s important for the public to understand how much money goes into a TIF “and how much gets diverted from tax agencies.”

She sits on the negotiating group alongside state Rep. Sam Yingling, a Democrat from Round Lake Beach, state Sen. Robert Martwick, a Democrat from Chicago, and a representative from the governor’s office, responsible for review various FIT-related bills for possible inclusion in a larger bill.

HB0179 received opposition from several groups, including the Northwest Municipal Conference. Fowler said there was already transparency in the tax bill, and residents could go to their local government’s website to find the municipality’s budget and see how their taxes were broken down.