In south suburban Cook County, Oak Lawn school officials are wrangling with village trustees over a tax increment financing district that would help pave the way for development of a community theater.
In Lake County, North Chicago educators are gearing up for a similar tiff over a TIF district in the downtown area. And in DuPage County, Glendale Heights school officials recently lost a battle over a $6.5 TIF district.
In these three counties, and in others across the suburban Chicago region, educators are sounding the same cry: TIF districts funnel millions of dollars to municipalities at the expense of schools, which already are strapped by tax caps and tax-hike weary residents.
The argument has been around for a decade, but the fires were reignited last week when school superintendents and mayors from across the state arrived in Springfield to debate a bill that would have radically altered how TIFs are created.
The bill–which was sponsored by Sen. Christine Radogno (R-La Grange) and has since been watered down due to intense lobbying–would have given school districts more power in the creation of a TIF and some of the money.
The amended version of the bill basically gives school districts a bit more control but still allows municipal officials the ultimate say.
Radogno said she expects the Senate Revenue Committee to take up the bill on Tuesday or Wednesday.
“The (original) proposal was a basic restructuring of the TIF statute itself,” said Radogno. “It’s too new and people are afraid of it at the moment.”
Fires of TIF opposition were further stoked recently when a south suburban school lobbying group released a study charging that TIFs have diverted more than $83 million away from schools in the Chicago suburbs.
“Right now, the municipalities have all the chips in their corner, and we’re just looking for more equal footing,” said Jerry Glaub, spokesman for the Illinois Association of School Boards, which is lobbying to change the present law. “I guarantee you, all school boards in the state support economic development, but not at the expense of schools and school children.”
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While suburban school advocates have put up strong opposition to TIFs, Chicago school officials have welcomed them, saying that, in the long run, city schools will benefit.
TIFs let municipalities designate “slum or blighted” areas where redevelopment would not happen without public intervention. Oftentimes, the municipality condemns property and then sells it to the developer at a discount. Once created, a TIF district earmarks increased property taxes generated by rising property values for public improvements and other development costs in the TIF boundaries. Other taxing bodies, such as the schools, don’t share in the increase as long as the TIF exists, which can be up to 23 years.
More than 200 municipalities have created about 400 TIF districts.
Proponents say TIFs are necessary to spur economic development in depressed areas. Without TIFs, they say, developers would not be as eager to pump money into large development projects.
Municipal leaders argue that schools don’t actually lose money with a TIF district because the development would not have taken place without it. Moreover, they say an increase in property value–and property taxes–sparked by a TIF eventually translates into a gain for all taxing agencies, even though they won’t start getting the higher taxes until after the TIF expires.
“If (TIF opponents) succeed in killing or limiting TIFs, they will only succeed in killing or limiting economic growth in their cities and in the state as a whole,” said Roger Huebner, director of legislative programs for the Illinois Municipal League. “I can’t see where that is going to help them in the end.”
Alan Anderson, director of the Will County Governmental League, said school officials should be more patient.
“Municipalities say `Yes, you are getting less revenue up front but the long-term benefits are very good to the school districts,” Anderson said. “But the school boards just keep pounding away on TIFs saying `But we don’t get all of our money up front.’ I don’t know how you get around it. Why should the school boards be involved in controlling economic development?”
School advocates do not publicly object to the TIF concept, but they do object to what they say is its bastardization. They charge that municipal officials designate TIFs in areas that do not legally qualify–areas that would be developed even without the special designation. A few even have taken municipalities to court over the issue.
“We think the municipalities ought not horde all the money,” said Jerry Petersen, superintendent of Community High School 218 in Oak Lawn, which lost access to more than $1.5 million due to TIF districts, according to the study released last week by the South Cooperative Organization for Public Education (SCOPE), a Blue Island-based schools lobbying group.
“Municipal officials fail to understand the law of diminishing returns,” said Petersen. “They continue to make money, and we lose access to money. We will slowly disintegrate and there will not be economic development TIFs or no TIFs. Economic development will end when companies cannot offer employees good schools.”
Some school officials say TIF districts have forced them, in part, to increase property taxes to help offset the cost of educating the new students economic development brings.
“We support economic development, and we welcome the students that (come from new housing), but it seems unfair that we cannot share in the profits that economic development brings,” said Fred Goering, deputy superintendent of Community Unit School District 300 in Carpentersville, which pushed a 12 percent increase in property taxes in 1994.
Goering’s district, which stretches across Kane, McHenry, Cook and DeKalb Counties, lost access to an estimated $8.2 million due to TIFs, according to the SCOPE study.
Now, led by SCOPE, school administrators across the state want legislators to give them more control over the creation of TIF districts and allow them to share in the profits the TIFs bring.
Glaub, with the state association of school boards, is not optimistic.
“Let’s face it, the TIF is the goose that lays the golden egg and the legislature is not going to take it away from municipalities and developers,” he said.