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New Law Designed to Show Property Owners TIF Fund Details

Gov. J.B. Pritzker signed a law designed to show Illinois property owners how much the tax increment financing districts in their area are diverting into special funds that can be used to spur redevelopment

 

Pritzker signed House Bill 2209 on Friday. Not all property owners may fully understand what a TIF district does, but if they pay property taxes in Illinois they’ll soon see a line on their bill about the TIF districts in their taxing jurisdiction.

 

TIF dollars come from diverting the higher tax revenue from the district as property values increase during a given period of time, often 20 years or more. That money can be used for incentives to spur development in blighted areas.

 

The measure will require property tax bills to include a list of TIF districts in the area and the dollar amount of tax allocated to each TIF district.

 

Republican state Rep. Mike Murphy, R-Springfield, said the law will make property taxes more transparent.

 

“The people [can] understand how [TIFs] operate and the money that it costs and how the money is being spent, so I don’t see a problem with them showing how the bill would look like without TIFs,” Murphy said.

 

Springfield School District 186 Board Vice President Scott McFarland has been critical of TIFs in the past.

 

“TIF districts do bring in new assets to the community, but they need to be built in a way to where it doesn’t hinder the school districts when they’re doing it,” McFarland said.

 

McFarland said it’s good to let taxpayers know on their bills what TIFs they’re funding. But he said the money for school districts, for example, is frozen when the TIF starts for 23 years. He said he’d like to see lawmakers tackle a formula to give some increases to school districts.

 

“Working with communities is always the better option, but if you have communities who aren’t willing to work with their school districts, which I’ve run into before, we need to be able to protect our schools and our students a generation from now when they’re going to be looking for that support and it’s not going to be there,” McFarland said.

 

When a TIF expires after 23 years, if it’s not extended by state lawmakers, the unspent money goes to the local taxing body in a lump sum.

 

There were more than 1,300 TIF districts that have been identified by the TIF Reform Task Force in a document produced in 2018 for the Illinois Department of Revenue. Districts have the option of asking the state legislature for extensions beyond the 23 years.