This is a continuation of Woodstock resident Susan Handelsman’s analysis of the Tax increments Financing District proposed by the City of Woodstock.
WHY TAXING BODIES AND CITIZENS MUST OBJECT TO WOODSTOCK TIF 2
6. Woodstock TIF 2 is extremely large compared to other McHenry County TIFs.
TIF EAV as a percentage of total Village/City EAV 2017:
Woodstock TIF 1&2: 8% TIF 2: 5.68%
Crystal Lake (3 TIFs) 1.18%
Harvard (2 TIFs) 5.33%
Marengo (2 TIFs) 4.56%
(Woodstock TIF 1&2 will co-exist for a few years. 8% may be slightly high because of areas of overlap)
This percentage of taxable EAV will be frozen for 35 years (ask Althoff and Reick whether it is easier to obtain a 12 year TIF extension in Springfield, or to prevent one).
Taxing bodies wanting more money every year for inflation will have to spread it out primarily over only the 94.32% NON-TIF properties at a compounding rate of inflation, inevitably causing a rising tax RATE.
Tax RATE increases create a windfall profit for TIFs! The inflationary property value ‘increment’ is taxed at prevailing RATES and given to TIF.
For example, if Woodstock’s current tax rate of 4% of fair market value goes from 4% to 5%, the TIF will receive 25% more revenue from incremental property taxes.
7. Woodstock’s published paper: “Understanding the Value of Tax Increment Financing (TIF) District Funding” contains many factual inaccuracies and material omissions of fact.
For one example, Woodstock’s paper states: “How does a TIF District benefit the area around it? Property values are very susceptible to the surrounding are. When your neighbors fix up their house and yard, it makes your property worth more as well. The same is true for businesses and the real estate nearby”.
Actual Data from the most recent time period of Woodstock TIF 1 suggest this is an inaccurate or very misleading answer, if they mean to imply that Woodstock TIFs helped non-TIF local property owners.
Tax years 2012-2017 percentage EAV increase/(decrease) between 2012 and 2017 are as follows***: Woodstock D200 taxing district EAV: (4.7%); Woodstock City EAV: (4.8%); Woodstock TIF 1 EAV: (3.7%)
Taxing District Joint Review Board representatives should at the very least require Woodstock to cite some source of reference for absurd assertions about TIFs lowering taxes and raising property values.
There should be an open-to-the-public discussion about the predicted impact of this TIF; speakers should be prepared to make known whether their projections are based upon performances under Chicago Gold Coast TIFs or Harvey IL. TIFs, or the current Woodstock TIF, and why which might be most applicable in this case.
8. Woodstock Plan calls for issuing debt which is to be guaranteed by Woodstock taxpayers. The Project cost projected $45.5 million suggests this will create a substantial debt encumbrance on existing properties, but will NOT (by law, be allowed to) encumber properties to be built with debt proceeds.
Woodstock properties are already encumbered by Woodstock D200 debt in excess of Statutory maximum 13.8% of EAV, in an amount roughly 6.25% of total property value. If Woodstock borrows $50 million 20 year general obligation debt, that will add $100 million principal and interest encumbrance on Woodstock properties; with Woodstock EAV $512 million that is 6.5% additional encumbrance of total current property value. (EAV=1/3 of total fair market property value).
9. TIF isn’t necessary; any developments which make sense are ALREADY be eligible for monetary benefits and incentives from Woodstock.
Why TIF? If Woodstock asserts that TIF bonds pay lower interest, do the math. Weight the cost savings of a half point or one point interest against the enormous additional fees and taxes and risk engendered by the TIF mechanism.
Enterprise Zone in place already as incentive. Woodstock has given many existing businesses public tax money subsidies, it could do so again for any project which makes sense. New low-income housing developments are eligible for many State and Federal incentives.
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