Strong lobbying efforts by officials of local governments helped secure passage of a $10 million appropriation for tax increment financing (TIF)
districts throughout the state in the final hours of the legislative session. The state`s 143 TIF districts, including Elmhurst, Warrenville, Bensenville and Hanover Park in Du Page County, will be eligible to receive increased state and local sales tax revenue to help pay for such improvements as street and sidewalk work, lighting and parking facilities.
Aurora, Geneva and Elgin also will be eligible in Kane County, a state Department of Revenue aide said.
Because this payout of sales taxes represents a loss to the state treasury, the Revenue Department had wanted the funding level held to about $3.4 million, said Elmhurst Ald. Olivia G. Gow, who has been involved in the formation of the suburb`s TIF district.
She went to Springfield Monday to help persuade House members to vote for the full $10 million, which she said could mean an estimated $150,000 a year to Elmhurst for downtown redevelopment.
TIF districts operate under state laws that allow increases in real estate taxes to be used for municipally sponsored improvements within the districts for up to 23 years or until the costs are repaid. This freezes tax revenue at pre-TIF levels for the taxing bodies, such as schools, in which the TIF districts are situated until the costs are repaid. This has meant that school districts, which get most of the revenue from a property tax bill, were subsidizing redevelopment.
But starting this year, for a limited time, state and local sales tax increases also can be applied to municipal TIF costs, making the state, in effect, the major subsidizer in some cases.
Bensenville Village Manager Michael S. Allison said Thursday that at the start of the TIF district in the suburb`s downtown area the state sales tax increment will be important. ”Property taxes take longer for the revenue stream to come in,” Allison noted.
The Revenue Department`s list of retailers in the TIF districts eligible for state sales tax money to pay off improvements shows 146 in Aurora, 48 in Geneva, 2 in Warrenville, 126 in Bensenville and 140 in Elmhurst.
Only districts created before last Jan. 1 are eligible for the sales tax aid. So many municipalities created TIF districts to take advantage of the state money that there has been concern about the funding level and whether there will be enough to go around.
The $10 million appropriation, if approved by the governor, should ensure that the districts get what they have counted on, officials said.
In addition, the $10 million pot should show potential developers that the TIF projects have a good chance of being successful, Gow said. Developers are gambling millions of dollars when they take on TIF projects.
