Dear Editor,
I offer a brief description of Tax Increment Finance (TIF) and the Enterprise Zone and some differences:
1. TIF is a State program that uses your property taxes, called Equal Assessed Value (EAV). Take the amount of property taxes paid today as the starting point, and as property values go up, any money collected above the line becomes TIF funds that the city holds onto until spent. This money would have gone to the school district, the county etc.
2. The TIF lasts at least 23 years. A TIF issued today goes until 2041. In 2041 it could be extended until 2053. A TIF binds future Mayors, Aldermen, School Boards, and County Boards for all those years. Only the city can spend the money and the School Board, County Board, etc. have no vote on how the money is spent.
3. The school district gives up the most money because they get the largest amount of property taxes. Using the school district as an example, as the costs go up, the amount of money they get remains at 2018 level – like a fixed income. The school district must still pay all their bills. In effect, your taxes go up because the school district must get money. So they issue a new bond or other funding mechanisms.
4. I believe that the Enterprise Zone is a better way. The Enterprise Zone is also from the state. The County applied for and got. Any new construction or remodeling construction in the Enterprise Zone gets tax breaks.
5. Important differences are that in the Enterprise Zone: 1)when construction is done, the State refunds the money that the school district would lose in a TIF, 2) it does not bind Mayors, School Board, or County Board 3) It does not “hold” tax money and 4) it does not generate other school funding like bonds etc.
6. Downtown could become an Enterprise Zone. Note: Any area that has both a TIF and an Enterprise Zone, the TIF is the one that must be used.
Finally, I asked the City Council for information on TIF Spending. How much was spent versus the financial benefit to the city? I still don’t know the answers to my questions. How can you decide the best way to plan and spend our tax dollars, if you have no accounting as to how the budget actually got spent?
Misty Haji-Sheikh
Here is a link that has additional information on TIF:
http://tifillinois.com/faq.htm
And additional information on the Enterprise Zone:
http://dekalbcounty.org/Econom
Editor’s Note:
Misty Haji-Sheikh is a member of the DeKalb County Board, representing District 7
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