Chicago Reader’s Ben Joravsky’s take on Chicago Tax Increment Financing Districts:
“As you know, TIFs are, in effect, a surcharge added to your property tax.
“The proceeds are used to pay for pretty much anything the mayor wants.”
He adds this in an earlier article:
“To compensate for that lost revenue, the schools, parks, county, etc are forced to raise their tax rates. As a result, TIFs raise everyone’s property taxes.”
Now Fox River Grove is following in the footsteps of Crystal Lake, McHenry, Huntley, Marengo, Woodstock, etc., and putting much of Downtown in a TIF District.
The Crystal Lake High School Board just approved the move on a 6-1 vote (Rosemary Kurtz voting”No”).
Woodstock’s Susan Handlesman has quantified the cost to taxpayers. You can read her analysis below:
Here’s the dollar amount this 300 unit development will require in subsidies from CL D155 taxpayers:
There are 6,600 enrollment, and the levy is $71 million.
Therefore, the school is taking annual property tax of $10,560 per student.
Census data indicates there are 2.8 persons per household and 22% are school aged. If 1/3 of those are in grades 9-12, then each new household is projected to produce .20 high school students per household.
.20 x $10,560 = $2,112.
300 new housing units x $2,112= $633,600 annually.
TIFs last 24 years, and every year the cost will rise with inflation**.
To the extent that other residential properties are included in the TIF footprint, these will add to the tax burden of non-TIF property tax payers, as inflation increases the costs of social service provision to these households as well.
Furthermore, school is only one part of the property tax bill, and high school is only a part of the school tax portion.
If we include grade school costs of TIF-produced students as the other 2/3 of .60 students-per-household created:
(2.8 persons-per-household) x (.22 school-aged) x (.66 grade K-8) x ($10,560 per student*)= $4224 per student annually
*(cost per grade school may/should be less than HS)
300 x $4,224 = $1,267,200
Adding the annual per-student school costs for K-8 and 9-12 we get $1.9 million.
Crystal Lake [that is District 155] property taxpayers will be paying $1.9 million the first year, and that amount will be rising with inflation, for benefit of the TIF private businesses’ profit and the politicians who will control the TIF cash flow for the next 30 years.
But $1.9 million only covers the new apartment complex.
Whatever other land or buildings are in the TIF footprint will also see inflationary assessment increases’ taxes diverted to the TIF insiders’ lock-box.
And school taxes are around 2/3 of the property tax bill.
Of course all the other taxes which property taxpayers pay for County and public services: MCC, MCCD, McHenry County, fire&rescue, library…these will all need to be paid on behalf of and for the benefit of the TIF households, by other taxpayers.
We can estimate the dollar amount of that as $950,000 annually and rising with inflation for the next 30 years.
Grand total cost to property taxpayers of this TIF: $2.85 million per year
$2.85 million per year (first year) for the new apartment complex, plus $9500 per other new household per year, plus inflationary** costs of existing households’ property tax burden.
**school inflationary costs are rising well in excess of CPI due to employee compensation and benefit contracts.