Wasteful TIF spending in Belleville
As property tax bills land in mailboxes in Madison and St. Clair counties, TIF districts sap local tax dollars.
Usually the tax increment financing, or TIF, discussion centers around Chicago, due to the city’s numerous TIF-funded projects. But Chicago doesn’t hold exclusive rights to bad TIF projects in Illinois. Downstate municipalities such as Belleville also engage in this opaque, often wasteful form of development finance.
In 2015, the Belleville City Council approved a TIF plan to redevelop a site along Illinois Route 15 that would provide $38 million in tax incentives, including $6 million in TIF money for the developers. Completion was originally planned for June 2016, then pushed to 2017. Now the developers don’t have a completion date to share with the city.
More recently, Belleville approved the use of $2 million in TIF funds to renovate City Hall. TIF is meant to encourage economic development and generate more tax revenue. However, with the City Hall project, no new taxes will be generated. Yet Mayor Mark Eckert has defended the use of these funds.
TIF is not “free money.” It funds redevelopment at the expense of other taxing bodies, such as schools and public works.
A TIF district is a special economic zone controlled by the mayor, and property tax revenue above a certain level from any property located in a TIF goes directly to a special fund the mayor can use to encourage developers to undertake projects.
Politicians often claim that TIF is the only option to encourage development. “OK, you don’t like TIF. Give me an example of what could the city use to keep us competitive or even in the game at all?” Eckert said in a statement reported by the Belleville News-Democrat.
Similar to the state’s now-expired Economic Development for a Growing Economy tax credit program, TIF allows the government to pick winners and losers among businesses while forcing taxpayers to foot the bill.
In order to make up for the revenue diverted to TIF funds, counties and municipalities resort to increasing tax levies. Taxpayers are then saddled with some of the highest property taxes rates in the state and nation. In fact, St. Clair County recently approved a property tax increase, in part, to make up for nearly $4 million of local taxes being diverted to TIF districts.
State Rep. Jay Hoffman, D-Swansea, hasn’t signed on to TIF reforms at the Statehouse. Additionally, Hoffman voted for a bill that expanded the TIF statute to create “super TIFs,” specifically in Chicago.
The solution is simple: Eliminate TIFs entirely at the state level, thereby forcing cities to address their financial problems directly instead of continuing to play financial shell games.
Until Illinois gets rid of these slush funds, municipalities will continue to hold taxpayers hostage to provide tax dollars to benefit a select few.