Tax Increment financing (TIF) districts in Cook County, Illinois will bring in a record $1.2 billion in property tax revenue this year. This is the amount of taxes collected on the increase in the property value of all the TIF districts in the county.
The reassessment of Chicago properties led the windfall. The reassessment contributed to a 12.5% hike in equalized property values, which factored in to the 27.4% increase in revenue for the city’s TIF districts. More than 25% of Chicago properties are in a TIF district, according to the county clerk’s recent report.
“Like a Piggy Bank”
Tax increment financing allows local governments to raise tax revenues from a certain area’s rising property values or new construction. They are supposed to be set in areas where development would not otherwise occur, although some TIF districts exist in downtown Chicago, where critics say they are not needed. TIF districts can stay in place for decades.
County Clerk Karen Yarbrough said she thinks municipalities use TIF revenues like a piggy bank. They know the money is there and they may use it for any number of things. “So if you live somewhere where there’s a TIF, or you live in a TIF, you should pay attention to your village fathers and mothers on how the money’s being used.”
An Answer to Chicago’s Budget Deficit?
In the past, former Mayor Rahm Emanuel used TIF surpluses to supplement Chicago’s budget. It’s unclear whether Mayor Lori Lightfoot’s administration will also use TIF money keep lid on the anticipated tax rate increase for 2019 pay 2020.
The mayor’s office said in a statement, “As has been done in years past, we are looking at the full extent of our obligations and evaluating how much is available, and how these funds could be applied to balance several key priorities for the city, which include addressing significant capital needs, reconciling an upcoming deficit in 2020, and ensuring we are maximizing the use of funds to support the continuing growth of our schools and neighborhoods.”