Inserting taxpayers back into Rockford TIF approval process
To reiterate my previous post, unelected officials, who represent each affected taxing district on a Joint Review Board, during the initial phases of the Rockford Tax Increment Finance approval process, typically do not inform their district’s elected officials of the scheduled state mandated JRB meetings and then fail to attend the meetings themselves.
Taxpayers are thus provided little or no representation at the JRB meetings, despite the fact that TIF approval affects area property taxes for 23 years.
The tax revenue diverted from the taxing districts to Rockford’s TIF Fund is off budget to the affected district’s Finance Committees, because the taxes are removed prior to each district receiving their annual revenue!
The entire JRB process needs to be reformed to restore taxpayer representation to this portion of the TIF approval process; because the JRB meeting is the only time the affected taxing districts have consequential input into the process.
Issues other than TIF eligibility criteria need to be negotiated between the city and the affected taxing districts, because the JRB also approves the TIF plan and the board annually reviews TIF reports provided by the City of Rockford concerning TIFs performances.
Municipalities, such as Winnebago County with Chemtool and the Village of Rockton with the Beloit Corporation, have designed TIFs that provide some protection to the taxing districts through intergovernmental agreements by sharing the tax increment at given time intervals or with percentage reductions over the 23 years.
Has Rockford ever explored or proposed a TIF with such features or researched Enterprise Zones or loans that still support economic development without impacting the other taxing districts and their taxpayers? TIFs are not the only economic development tool available to Illinois municipalities.
In order for this collaboration to occur, the elected officials of all the affected taxing districts first need to be made aware of scheduled meetings of the TIF Joint Review Board to insure that a representative or an alternative member will attend that meeting and that the representatives be instructed to vote the elected board’s positions regarding relevant TIFs.
The attorney for the school district, which voted against the Auburn Street TIF in December, questioned the success and effectiveness of Rockford’s other TIFs. He was told that the Auburn Street TIF should stand on its own merits.
The attorney had a valid question because unsuccessful TIFs have been a financial drain on the city’s TIF fund and Rockford’s General Fund currently in the amount of $2M to $3M per year, which is paid by property taxes.
The school district correctly assumes that economic development should have a “concrete and measureable positive impact on the community tax base.”
Businesses contacted in the Auburn Street area had positive feedback for TIF approval and it was suggested at the JRB meeting that if the City of Rockford does not offer some type of support for the small businesses, they will not be able to maintain their businesses and tax levy.
Additional representatives attending the JRB meeting could have argued that the purpose of a TIF is not to maintain the status quo or to give businesses in the area financial support paid for by Rockford taxpayers.
The goal of TIFs is to increase the value of the property’s tax base within the area, so that higher tax revenue is generated for the future when and if the property returns to the tax rolls, thus lowering the taxes of the other property owners – our return on investment.
Issues discussed during negotiations in this phase of TIF approval would also give members of the city council additional information not previously garnered from the affected taxing districts prior to the city council’s final TIF approval.
The Board of Education has established a policy that explicitly lays out their TIF process and so should all the taxing districts affected by Rockford TIFs.
Taxpayers are funding these TIFs, in one way or another, with little return on their investment – the primary reason the taxpayer’s elected representatives should be an integral part of the TIF process.