McSweeney Introduces Backdoor Referendum Bill for TIF Bonds

David McSweeney

David McSweeney

State Rep. David McSweeney has introduced a bill that would allow residents to petition for a referendum to stop the issuance of Tax Increment Financing bonds not backed by local property taxes.

Here is a synopsis of the bill:

Amends the Tax Increment Allocation Redevelopment Act in the Illinois Municipal Code.

Provides that all obligations issued by a non-home rule municipality in connection with the Tax Increment Allocation Redevelopment Act (instead of TIF obligations secured by the full faith and credit of the municipality) are subject to a backdoor referendum.

Provides that a petition calling for a referendum on the issuance of those bonds shall be filed within 45 (instead of 30) days after the publication of the ordinance.

Makes changes concerning the signature requirement for those petitions.

Effective immediately.

The number of signatures on the petition would be the greater of

  1. 7.5% of registered voters in the municipality; or
  2. the lesser of 200 or 15% of the registered voters

= = = = =

The proposed Tax Increment Financing District is in the upper left hand corner of the map.

The proposed Tax Increment Financing District is in the upper left hand corner of the map.

If passed, this could give voters of non-Home Rule municipalities (generally those under 25,000 people) like Lakewood, where I live, the ability to have more than a say at a TIF hearing or village board meeting.

Lakewood’s TIF study shows $66 million of possible expenditures.

Lakewood’s annual budget is about $5 million.

Possible ways to spend the Lakewood $66  million of TIF bond money.

Possible ways to spend the Lakewood $66 million of TIF bond money.


Comments

McSweeney Introduces Backdoor Referendum Bill for TIF Bonds — 3 Comments

  1. Rep. McSweeney got the Alternate Revenue Bond Act changed a couple of years ago, which stopped the MCC’s administration giant expansion plans.

    That he was able to steer this bill through a Democrat legislature and get a Democrat governor to sign it shows not only his skill as a legislator, but the esteem in which his colleagues hold him.

  2. $66M / 23 years = $2.87M per year.

    $2.87M / $5M = 57% increase.

    Lakewood just increased its annual budget 57%.

    There are all sorts of disclaimers, first year TIF expenditures could be more or less, we are only talking about the first year, we have not analyzed the budget, etc.

    $5M + $2.87M = $7.87M.

    There needs to be a lot more transparency about TIFs, including an analysis of parcel level data posted on the taxing district website, all the detail supporting the TIF study should be posted on the taxing district website, there should be public Q&A sessions after the public has all the detail level data and before a vote on the TIF district is taken, the county clerk should have more information on existing TIF districts on their website similar to that of Cook County, TIF data should be included in property tax bills, transparency about how TIF districts hike taxes of those outside the TIF district, explanation of how TIFs affect taxing district extension, etc.

    The perfect example of how village officials do not always make wise use of TIF dollars are the four stone monuments depicting the beginning and end of the TIF district on Route 14 in Crystal Lake.

    What shoppers say I’m going out of my way to shop in the stone monument section of town, and thank goodness for stone monuments to tell me where the TIF district begins and ends?

  3. This bill doesn’t protect against “tif’s for profit”.

    In the case of Lakewood’s tif, it accomplishes the purpose of shoveling off all monetary responsibility for the education of “Lakewood” tif children onto taxpayers entirely outside Lakewood’s borders. Furthermore there will be no low-income -housing children attending school with Lakewood-proper children.

    Adding insult to injury to non-Lakewood taxpayers subsidizing wealthy Lakewood, Lakewood will be able to build 100 low income housing units in its tif, solving the sticky issue of compliance with Illinois Affordable Housing Act….AND COLLECT A PROFIT IN THE PROCESS.

    Think about it– any housing unit (or any other structure) whatsoever built on a cornfield will yield 99.5% tax incremental funds which pass straight to Lakewood management.

    So low- income housing will be 100% subsidized by Woodstock residents, and all tax dollars from those housing units will pass to the gals in charge of Lakewood, to apportion amongst favored developers at their whim. For the next 35 years.

    Of course the same is true for Woodstock Fire And Rescue District.

    The dollar amounts appear to be smaller than for the school subsidies for Lakewood…but who knows?

    If a high rise were built on tif property, it would be the liability and responsibility of Woodstock Fire And Rescue to spend whatever is demanded to be in compliance with safety standards.

    What new equipment and personnel needs?

    New personnel cost their salary and benefits far into the future, in multiples of current salary amounts.

    In D200, Woodstock taxpayers will start off paying $600,000 per year to subsidize Lakewood. (100 housing units=60 children. Property Taxpayers pay $10,000 per year per student).

    Furthermore there will be (according to Lakewood report’s projections of EAV) another $4.7 million of statutorily described borrowing ability for the school district (13.8% of EAV).

    The Statute possibly never anticipated the eventuality of enabling borrowing against “phantom” EAV.

    All borrowings by D200 will be a debt burden to be guaranteed and paid for, for the next 35 years, by Woodstock taxpayers on behalf of Lakewood (who receives any taxes paid by those incurring the need for the educational expenses).

    And $4.7 million of debt can equal 4- 5 times that debt for Woodstock taxpayers; there is a CAB from 2006 in which D200 borrowed less than $14 million, and after less than 20 years the taxpayers will owe the principal PLUS $50 MILLION DOLLARS INTEREST.

    Similarly, the additional statutorily-enabled-borrowing made available to MCC, MCCD, and other taxing bodies, as well as additional costs for roads, police, and liability insurance or tort-fund set-asides will be borne by ALL McHenry citizens for the narrow benefit of Lakewood.

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