Negatives About TIF Districts

Please use RichmondTIF.com as a resource to form your own opinion.

Advantages/Disadvantages Of TIFs

Tax increment financing: A bad bargain for taxpayers.

TIF Districts Hinder Growth, Study finds that cities without TIFs grow faster

One of the largest downfalls of TIF seems to be that most start out with a "good intention" of improving an area. It does not take long to change those good intentions for what would be accepted as developers start to make offers that just seem too good to be true. Going by the old adage of "if it seem too good to be true, it probably is", property owners who have used their own money to improve areas get replaced by developers who use YOUR money and reap all the rewards.

In redeveloping an area, consider what is more cost effective. New roofs, new front facades, new electric services and wiring, foundation repairs - or tear it down and start fresh. The last choice is what is generally taken. One by one, historic buildings disappear and are replaced. One by one, small entrepreneurs with 2 or 3 generations of a family business are forced out of an area because they can not compete with a larger company's buying power on the goods they sell. So yes, an area is revitalized, but at what cost?

TIF and the Schools

TIF Bad for Schools

Stealing Money From Kids

TIF Slush Fund Siphons Money from Chicago School Coffers

Park Ridge IL Board of Education Letter to Parents: Their reasons for rejecting proposed TIF.

Responsible Economic Development Citizens of Oak Park: Don't want TIF extension!

Neighborhood Capital Budget Group: How do TIFs affect schools?

National Education Association

NEA: Corporate Tax Handouts Harm Public Schools, NEA Report Shows

Illinois Education Association

IEA: TIF Hurts Local School Districts

Illinois Association of School Administrators

TIFs receive mixed reviews

TIF Districts hinder growth

opinion: The most negative thing a TIF often does is it will often cause municipal officials to tell half-truths or distort the truth. Visit: What Are Some of the Popular Myths Concerning TIF?

then review our comments to their claims below.

Truth in advertising! How about truth in government advertising. Did you know that government officials cannot be held personally responsible for what they say or do while they are in office performing their elected duties. To give them the benefit of doubt would be to accuse them of not understanding TIF or being misled by consultants and/or developers. If they are educated to TIF then they are just plain deceptive in order suit their agenda. As voters we want to trust our elected officials, its hard to do that when they treat us like children whose parents think they know what is best for them.

What Are Some of the Popular Myths Concerning TIF? Debunked!
Village of Richmond citizens have you heard any of these claims from your village officials?

Some property owners would be receiving some kind of tax break. This is not true. Property owners pay the same amount of property taxes they would have paid had the TIF District not existed.

The idea behind TIF is to use the money to attract developers by returning some of the money the developer will be paying in increased property taxes back to their projects and to the TIF area, but that is not a tax break?

Property owners pay the same amount of property taxes they would have paid had the TIF District not existed.

Which property owners? The ones outside the TIF district? One of the "much touted" benefits of a TIF district is that it will raise property values, wouldn't that automatically raise property taxes? The same percentages may be paid, but not the same amount. If they can't raise property values outside the district that means the TIF is not working.

Property taxes for owners within the TIF District will increase. This is also not true. Their property taxes are the same as everyone else in the municipality. They will only increase if the value of their property increases.
Key phrase: they will only increase if the value of the property increases. The only way for a TIF District to pay for itself is for the property taxes in the TIF District to increase. That's what the whole thing is based on. If property taxes don't increase, there are no funds to put back toward the TIF district or pay for bonds that were sold to finance the TIF District. If the TIF district fails, then in order to pay off those bonds the entire community is taxed by special tax accessment.

The school district will be deprived of revenues during the life of the TIF District. Again this is not true. First, because of the way tax rates of the various taxing bodies are calculated when a TIF District is established, the school district as well as the county, the municipality and the other taxing bodies continue to receive the full amount of the taxes that they have levied during the life of the District. Secondly, the school aid formula at the state level has been adjusted so that during the life of the TIF District, the school district actually receives more school aid from the state than it would have, had the TIF District not been in place. Third, because certain areas may not have been developed without TIF, the school district could not take advantage of any increased equalized assessed value.
Here we go again with the less is more argument for the schools. The number 1, major complaint from schools boards today is that the state is not handing down funds that appeared allocated to the school districts. If a development came without a TIF the schools would get what they had allocated locally. If development comes with a TIF the school districts get no benefit from the increase in property taxes, that, let me remind you, they say won't happen. So how does that not deprive the schools of revenue? Their argument is that, the schools wouldn't get the increase if it wasn't for the TIF so they are not really missing out on anything any way.

The City of Palos Heights can condemn and take property. The City of Palos Heights has no plans to take any properties from any person in the TIF plan. A TIF does not create a new power for a City to take property. Illinois statutes separate from TIF legislates taking of property with eminent domain but this is not the intention of the City of Palos Heights.
More semantics! No, its not the city that will be able to condemn and take your property it will be a new, separate, locally appointed government corporation called the TIF Board, and that board and the consultants are how the City will get around any accountability issues.

True a TIF gives no new power to the city, However it does give those "new powers" to the TIF Board. Among other things, creating a TIF District gives the TIF Board the power to acquire and combine property in the name of eminent domain.

Its one thing for a city to officially state that they will have that power and will not use it, but to state that they don't have improved power for eminent domain when they do is deceptive from the beginning. They attempt to calm you by distorting the truth about Illinois Law, that law clearly states what a TIF board can do, concerning acquiring and combining property. They are trying to confuse you with the other law that says a municipality can run sewer lines through property if it is absolutely necessary to save tax dollars.

Conclusion. In Conclusion the City of Palos Heights intention is to take a positive approach to the use of TIF as a tool to make improvements and stimulate progress. Palos Heights is a beautiful Community with many fine attributes, our intention is to focus on the positive, and give incentive where needed to those areas deemed qualified so that we may enhance and secure our future to the benefit of all of our citizens.

I conclude that in this cities attempt to accentuate the positive they have eliminated the negative altogether. I would think a municipality considering a TIF would want to make it honestly clear to the voters what the risks are as well as the benefits. Support for the ideas of our elected officials would come so much easier for them if they were at least honest with us.