TIF approval removes taxpayers from portion of process

About 18 months ago, I posted concerning the Joint Review Board (JRB), consisting of non-elected representatives from specified local taxing districts, convened by the city to determine if newly proposed Rockford Tax Increment Finance (TIF) districts meet the eligibility requirements of municipal state code.

The board consists of 9 members, one selected from each – Community College, school district, park district, library district, township, fire protection district, the county, the municipality requesting the TIF, all of which have the authority to directly levy taxes on the property within the TIF area, and a public member.

By law, a notice of the meeting, both the time and place is announced at least 14 days but not more than 28 days after the mailing of the notice by the city, so the taxing districts have ample time to arrange to attend the JRB or find an alternate member to decide an issue that may affect their revenue and our taxes for 23 years.

Only the city officially showed up for that meeting 18 months ago and the affirmative vote by the lone taxing district representative declared the TIF area met the eligibility criteria. The state law requires only that a majority of a quorum of the representatives present at the JRB is sufficient to approve TIF eligibility.

Therefore, any increase in the TIF area’s EAV base assessment, and the resulting increase in taxes over the next 23 years, would be collected by the county and sent to the city of Rockford to be placed into the TIF fund, which continues to be supported by the Rockford taxpayers through the city’s General Fund.

The JRB meeting in 2012 lacked representation by 78% of the taxing districts. The JRB meetings are not usually well attended because the taxing districts, under Tax Caps, may simply raise the rates to maintain their taxes even when property values are decreasing. Another reason is that the city council can, by a vote of 60% of its aldermen, override the JRB decision.

Well, it happened again!

Only two taxing district representatives bothered to attend the latest JRB meeting for the Auburn Street TIF district, according to the meeting minutes – the school district, and obviously, the Rockford representative. The vote in favor of the Auburn Street TIF eligibility was 2-1, with the deciding vote being cast by the non-elected public member.

This vote may or may not have been the correct one, but the process used is certainly questionable, because of the lack of involvement of the elected officials, who represent the affected constituents in this process. This process must change because the taxpayers have no representation in this eligibility approval cycle.

Cedric Lewis, RSD205 Chief Financial Director, represented the Rockford School District and voted No. Attorney Patrick Hayes represented the City of Rockford and voted YES. No other taxing body deemed it necessary to attend the JRB meeting to represent their interests or those of their constituents.

The public member, according to state code, should be representative of the area being considered and/or have residential or income level similar to those in the blighted area. If no such person qualifies, then the JRB is relieved from having a public member and the resulting vote on the Auburn TIF would have remained tied (1-1), requiring a 60% majority vote by the City Council for final TIF approval.

The minutes showed that the two taxing district representatives attending the JRB meeting chose Don Thayer, Janyce Fadden’s replacement, who as President of the Rockford Area Economic Development Council, is hardly an unbiased public member as a developer. The Rockford City Council now only needs a simple majority to approve their 33rd TIF.

Only a simple majority of the JRB is needed to pass the eligibility criteria for the TIF area. The fact that only the city and the school district showed up to the JRB meeting clearly shows complacency by the local taxing districts with the TIF implementation process, and a sharp lack of concern for taxpayers who might have to compensate those districts for any taxes lost to the TIF over those 23 years!

Next post – Placing the taxpayers back into the TIF approval process.