This came in an email from Lakewood Village Trustee Jason McMahon. McMahon was appointed to the Board by former Village President Erin Smith after Ken Santowski resigned.
Political Promise to Cost Lakewood Taxpayers 12%
A political promise to eliminate the Lakewood TIF will be rushed through the Village Board meeting on June 13, 2017.
Dissolving the TIF will place approximately $220,000 worth of TIF expenses on Lakewood residents.
This will cost EVERY Lakewood home an average of $150; a 12% INCREASE in our Lakewood property taxes.
To put it another way, over the last four years Lakewood has spent an average of $230,000 per year repairing and replacing our roadways.
The cost of dissolving the TIF is equivalent to an entire year of road maintenance and better roads.
Well maintained roads help support our property values.
To significantly reduce our property taxes we need sales tax income (more about this in my next post).
The main goal of the TIF is to bring infrastructure to the corner of Routes 47 and 176 to support commercial development.
This will generate new property and sales tax revenue for Lakewood, which will have a greater impact on lowering our property taxes than simply trying to cut 10% from Lakewood’s property tax levy.
The Routes 47 and 176 intersection is one of the only areas Lakewood has to develop significant sales tax income.
Without the TIF it would be extremely difficult to pay for the necessary infrastructure, therefore, no way to increase funds coming into Lakewood to offset our property taxes.
TIF’s are fairly simple to understand. (Dollar amounts are for illustrative purposes only.)
- Upon creation, a property value “baseline” is set by the TIF; let’s say $1,000,000 in property value. The property generates approximately $35,400 in tax revenue for our various tax bodies. Neither your property value nor the amount of taxes paid changes with TIF creation.
- As property inside the TIF is developed, the property value rises; let’s say to $3,000,000 in property value.
o This generates $106,300 in tax revenue; however, the amount over $35,400 (approximately $70,900) is diverted into the TIF to pay for the infrastructure needed to support the development.
o Taxing bodies agree to this because once the TIF ends, they benefit from the significant increase in property taxes, a benefit they would not have received if they had not worked together to support commercial development. Schools alone receive almost 72% of the increase.
- When the TIF expires or is dissolved, (in our case, when the infrastructure has been paid for) the property value “baseline” disappears and all the taxing bodies receive the full benefit of their investment. This inflow of new tax dollars should help reduce the burden on existing taxpayers.
We can all agree there are MANY examples of mismanaged TIF’s throughout Illinois.
Lakewood now has a chance to show how a TIF can be used for the benefit of ALL, when used for the proper purpose and managed properly.
We can easily modify the TIF and restrict the use of TIF funds by amending the documents without dissolving the TIF and WITHOUT losing money.
There is no eminent danger to Lakewood taxpayers in leaving the TIF open, but there is a cost to closing it.
You may have been lead to believe Lakewood taxpayers could be forced to pay $9,000 per student if residential development occurs in the TIF area.
While possible, it would NEVER happen.
Any housing development in the TIF area would need to gain approval from Lakewood for a zoning change.
Lakewood could simply disconnect that area from the TIF or impose an SSA on the development to cover the cost. No threat to residents.
We have a strong, conservative board for the next four years and without significant development by 2022, the TIF will dissolve on its own after having paid back more of the $220,000 it owes Lakewood.
I urge you to contact our new Village President, Paul Serwatka, and his tax fighter team: Phil Stephan, Amy Odom and Rich Ritchie and urge them to stop this process that will cost Lakewood taxpayers MORE money.
Ask them to come up with viable solutions that don’t cost Lakewood taxpayers MORE money.
Wasting REAL dollars is a lot scarier than “what ifs.”