A great web site with articles on TIF abuse is www.chicagoreader.com/tifarchive/.  These articles deal primarily with TIF abuses in the City of Chicago, but the points raised are equally applicable to TIF abuse in our community.

DON'T ROB OUR SCHOOLS TO SUBSIDIZE DEVELOPERS

Tax increment financing - also known as "TIF" - districts are bad for school districts because they siphon property tax dollars away from schools, parks, and other taxing districts entitled to the money, to subsidize politically favored development projects.

In brief, municipalities (like Wheaton) can create TIF districts.  The "tax increment" is the increase in assessed value of property within the TIF district over the assessed value at the time the TIF district was created.  The TIF district diverts the taxes generated by this increased value away from schools, park districts, and other taxing bodies to a TIF fund that is usually used to subsidize commercial or other development projects in the TIF district.  This can last for 23 years, meaning the value that District 200 can tax is frozen for 23 years.  This forces a shift of the tax burden to homeowners and others who have to make up the difference.

In Wheaton, School District 200 receives about 66 cents of every property tax dollar.  This means that when a municipality within District 200 creates a TIF, District 200 is effectively paying 2/3 of the cost of the subsidy.

Even if you believe that government is better at planning and subsidizing development than the free market, it should not do so when our schools are paying 2/3 of the cost.  District 200 MUST take a public stand against the use of TIF.  If we can make all properties in the District, especially large developments, pay their fair share of taxes, we can increase school funding without a tax increase, and reduce the pressure for higher taxes on homeowners.

Below are comments I delivered at the November 21, 2005 Wheaton City Council Meeting on this subject.

Remarks of Mark O. Stern to Wheaton City Council

November 21, 2005

My name is Mark Stern and I live at 1115 South Gables.  Because the City raised its property tax rate last year and my assessed value also increased, the property taxes I paid to the City went up 19%.

Next year, I want the City to give this money back to me, so that instead of the City using my tax money to benefit everyone, I can use it for projects that improve my own house, such as repaving my driveway and putting in new landscaping.  Also, I’d like this rebate to continue for the next 23 years.  It will make the neighborhood look better, and just think how much more my property will be worth in 23 years!

This sounds crazy.  Because I would not be paying my fair share, every other homeowner and business would have to pay higher taxes.  It would divert tax money from public use, and the problem would get worse every year because the City would lose every annual increase in value.

Yet as crazy as it sounds, that’s what the City does when it creates tax increment financing, or “TIF” districts.  The City’s own figures indicate its latest TIF will cost taxpayers over 45 million dollars over the life of the TIF.  About 1/8 of this money should have gone to the City.  The cost is even higher for School District 200, which should be getting 2/3 of this money.

The City should use taxes to fund government, not to play developer.  One “needed” project the City funded with the current TIF was space for LaSalle Bank.  Not only is there no lack of banks in downtown Wheaton, some members of this Council have even proposed banning new banks after first subsidizing them.  The City is also trying to spend our tax money to condemn property of tax-paying business owners.  This is what happens when “planning experts,” instead of the market, decide what gets built.

Taxes should be fair, evenly distributed, and low.  The City is sitting on millions in TIF money, while it asks homeowners for another increase in sales and property taxes.  The free market built downtown Wheaton over more than a century.  Let the market work, stop the central planning and condemnations, and stop siphoning millions of tax dollars to subsidize the favored few by shifting the tax burden to everyone else.

Mark O. Stern

1115 South Gables Boulevard

Wheaton, Illinois 60187

(630) 690-1133

admin@markostern.com

www.markostern.com

This page last updated November 29, 2006.