IBJ: What is the Illinois Tax Increment Association?
Henderson: The Illinois Tax Increment Association is a public-private, not-for-profit organization that was established in 1987. Its membership consists of municipalities and other governmental entities, corporations, partnerships, associations and individuals engaged in or interested in tax increment finance and economic development. ITIA represents over 260 members, who oversee more than 80 percent of Illinois TIF redevelopment projects.
IBJ: What’s the purpose of the ITIA?
Henderson: The ITIA works to foster sound economic growth in the State of Illinois by providing our members with opportunities for professional dialogue, education and exchange of information. We do this through conferences, quarterly newsletters and Legislative Alerts, and our website, as well as other publications, workshops, seminars, and events of interest to the membership. We also assists our members by providing effective representation of their interests with the executive and legislative branches of state government.
IBJ: The spring conference of the Illinois Tax Increment Association is scheduled for April 9 through 11 in Champaign. What’s on the agenda?
Henderson: There are a lot of people who’ve retired and there’s a new group of young, economic developers and city officials who need an introduction to the basics. We’ll also be providing information on extending the life of TIF districts through legislative approval; steps to terminate districts and the
annual reporting requirements. We’re also going to have sessions on attracting retail development; how you can blend TIF districts with business districts and other types of districts. The city of Champaign is going to give a bus tour of its districts.
IBJ: How long can you extend the life of a TIF district and what’s the process to do so?
Henderson: You need a letter of support from all of the taxing districts that are encompassed in the district and then you have to get legislative approval. How long it can be extended is based on the reasons for extending it. The typical issue is that there are outstanding bonds that have to be repaid.
IBJ: It seems most TIF districts are focused on commercial and industrial development and redevelopment. I think most people don’t realize that when the commercial tax base declines, the tax burden is shifted to the residents.
Henderson: Yes, and that’s what happens when you have declining manufacturing and industrial bases and there are no improvements to that area. You don’t generate the property tax necessary to maintain the infrastructure and services. And, if the community has a lot of senior citizens; they have no one in school; they’re living on Social Security; there’s only so much you can get out of people living on a fixed income.
IBJ: Are there any troublesome TIF bills that have been filed in the legislature this session?
Henderson: The Illinois Policy Institute has submitted a bill. It would impact the level of general state aid funding for school districts that include TIF districts. The funding formula is based on the availability of local resources. School districts with lower property tax bases receive more state aid than those with higher tax bases. The incremental increase in tax base within TIF districts never has been included in the calculation. The Institute is claiming that there’s growth in these districts and it should count toward the wealth of the school district despite the fact that they are not actually receiving it. Essentially, it would be punishing school districts for something they’re not receiving.
IBJ: Here in metro St. Louis there always seems to be controversies regarding tax increment financing on the Missouri side and efforts to repeal the statute in their state legislature. Is there anything like that going on in Illinois?
Henderson: No. Our statute has been pretty well reformed. We fine tune it every now and then. But TIF is about the last thing available for communities. There’s a lot of transparency in Tax Increment Financing in Illinois. The other taxing bodies are involved and everybody knows what’s going on.