Wednesday, November 12, 2008

Southwest News-Herald Suburban: Cook County Clerk Blasts TIF Expansion: "Cook County Clerk David Orr recently produced a report in which he blamed the proliferation of tax-increment financing districts in the county for siphoning too much revenue away from taxing bodies such as schools and libraries. Tax increment financing districts, usually set up for 23 years, are an economic development tool designed to attract business development to blighted areas. They do not raise taxes but for the life of the TIF, any property taxes generated within them above a certain level are returned to the district for redevelopment. According to the report. TIFs are the fastest growing part of property tax bills, although the revenue they take in is not listed on bills. Orr pointed out in the report that nearly $900 million in property tax money was diverted into TIFs in Cook County in 2007."
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David Orr is one of the good guys in Cook County politics. This TIF situation is becoming a major problem for school districts and libraries and all the other special taxing districts. They are not getting their share of the revenue from growth, but they end up with a share of the costs. The schools get the kids from the new subdivision, but they don't get the increased property tax revenue from their parents.

Now imagine that the new subdivision is an HOA. The municipality doesn't even supply them with a full set of services but takes a full share of property tax. The parents end up paying all their property tax, all their HOA assessments (for the services not covered by property tax), and then they have to pony up a tax increase to fund the schools because the schools have all these new students to serve, but the TIF is getting the additional property tax revenues their development generated. No wonder the housing market crashed--it is amazing more people haven't walked away from their homes. When you add the tax situation to the mortgage situation many of them must feel like cows being milked.

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