It was October, 2005, when the Vulcan Lakes TIF proposal by the city council spurred me to start McHenry County Blog.
I knew–and knew that most others didn’t–that every dollar that gets poured into a Tax Increment Financing District’s project comes out of your and my pockets.
That’s because local tax districts are not at their maximum tax rates, as governed by state law.
The Property Tax Cap has forced those tax rates down while real estate values increased far faster than the increase in the cost of living.
So, if the value of your house went up 10% one year and the CPI increased 3%, the tax rate of each district had to be decreased to make sure its tax take would not exceed the CPI.
A bit complicated, but the result is that no tax district is at its maximum rate limit.
That means when assessed value is stolen from it by a city’s or village’s creation of a TIF district, the other tax district (read school district, park district, county government, you name it) can just increase the tax rate to get the same amount of money it would have otherwise received.
That’s why I called it a “TIF Tax Hike.”
So, with “free money,” you can expect that cities and villages won’t be too careful with it.
Take a look at the new fee collection gate being constructed at Vulcan Lakes…oops, Three Oaks Recreation Area, a place with precious few oaks, I would imagine. (You can see other pictures here on the city’s web site.)
Compare that to the one used by the Crystal Lake Park District. It’s portable. Made of wood.