R2023-27 Resolution Authorizing Support of Tax Increment Financing

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HOW DOES TIF WORK AFTER CREATION? The growth of the EAV of property within the TIF district (the increment) is collected into a special fund for use by the municipality to make additional eligible investments in the TIF project areas. The reinvestment generates additional growth in property value, which results in more revenue growth for reinvestment. Once a redevelopment project is completed and has been paid for, the TIF district may be dissolved and the tax base returned to full use by all eligible taxing bodies. Allocation of equalized assessed value within a TIF district HOW LONG DOES A TIF DISTRICT LAST? Tax rate Under Illinois law, a TIF district may last for Equalized applied and Assessed taxes go to Full EAV: up to a maximum of 23 years. This period Valuation TIF district new EAV can be extended by 12 additional years upon (EAV) added to approval by the Illinois General Assembly. $ Full EAV from frozen EAV redevelopment atof In some cases, the General Assembly has TIF of extended TIF districts twice, for a total of 47 All taxes go to schools, years. Municipalities seeking extensions must Frozen EAV city,county, receive approval from the General Assembly, etc. which requires, by rule, letters of support from :applied ax rate overlapping units of local government whose andboundaries fall within the TIF district. es go to s �o �5 20 ools,city, TIF 23 year life ofTlFTIF OTHER FUNDING SOURCES BESIDES TIF unty,etc. Created Dissolved TIFs are more frequently used now because snorce rhe 'Firai Reporl of the 11F Reform Ja K Force,..June] 2fl,, other development tools, like Industrial Revenue Bonds and Urban Development and Infrastructure Grants, are no longer readily available to local governments. Federal and state aid to local governments has been reduced. At the same time, unfunded federal and state mandates have increased the financial burden on most municipalities. Factor in state imposed property tax caps, and the funding problems facing local governments make it obvious that local governments are left to do more with less. TIF offers local governments a resource to revitalize their communities by expanding their tax base, offsetting, in part, the federal and state funds that are no longer available to them without imposing increased taxes on the whole community. WHAT CAN TIF BE USED FOR? TIF funds may be used to reimburse eligible "redevelopment projects costs" as defined in the Act' The statute provides a comprehensive list of associated project and reimbursement costs which may include, but are not limited to, the following actions occurring within the TIF district: • Administration of a TIF redevelopment project; • Property acquisition, renovation, rehabilitation and demolition; • Construction of public works or improvements; • Job training related to the TIF area; • Financing costs, including interest assistance; • Studies, surveys and plans; • Marketing related to sites within the TIF; and, • Professional services, such as architecture and design services. 65 ILLS 5/11-74.4-3(q). Illinois Municipal league I Tax Increment Financing I Page 2